firm admits members to its network based on signals about entrepreneurs' types. Network membership is observable, which … allows lenders to offer different interest rates to network and stand-alone entrepreneurs. We show that a network outcome can … display a smaller number of high-type entrepreneurs even though the network is neither nepotistic nor informationally …

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 … absence of a network. Thus, the formation of the network is inefficient as entrepreneurs incur networking costs for purely …

We study entrepreneurs’ behavioral responses of effort (moral hazard) to avoid business failure.This is done in the …