| Abstract: | We develop a model of informal financial networks and presentcorroborating evidence by studying the role of property brokersin the U.S. commercial real estate market. Our model demonstratesthat service intermediaries, who do not themselves supply loans,can facilitate their clients' access to finance through informalrelationships with lenders. Empirically we find that, controllingfor endogenous broker selection, hiring a broker strikinglyincreases the probability of obtaining bank finance. Our resultsdemonstrate that even in the United States, with its well-developedcapital markets, informal networks play an important role incontrolling access to finance. |
