TY  - RPRT
        AU  - Inci, Eren
AU  - Parker, Simon C.
        TI  - Financing Entrepreneurship and the Old-Boy Network
        PY  - 2012/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6288
        UR  - https://www.iza.org/index.php/publications/dp6288
        AB  - We study entrepreneurs' start-up financing from banks and local financiers. An informal network, whose membership cannot be observed by outsiders, conveys the good signals it gets about the hidden types of network entrepreneurs to local financiers, which are then reflected in different loan terms. We show that there are winners and losers as a result of the network even among its members. Because all projects have positive net value, it is efficient to finance them even in the absence of a network. Thus, the formation of the network is inefficient as entrepreneurs incur networking costs for purely redistributive gains in the form of better loan terms as network members.
        KW  - start-up financing
KW  - networks
KW  - financiers
KW  - entrepreneurship
        ER  -