Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159553
Authors: 
Fedele, Alessandro
Mantovani, Andrea
Year of Publication: 
2010
Series/Report no.: 
Quaderni - Working Paper DSE 712
Abstract: 
Does management consulting facilitate the access to credit for start-ups? This paper tries to answer the question by developing a theoretical framework where a firm applies for a bank loan to implement a risky project. The probability of success increases if the firm exerts a costly managerial extra-effort, but the bank is unable to observe such an effort: a moral hazard problem may therefore occur. During an economic downturn the project's expected profitability is likely to be low relatively to the effort cost. In this case we find that credit is granted only if the bank hires a management consultant, even when the latter does not improve the business practice.
JEL: 
M11
M13
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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