TY - JOUR
T1 - The value of financial intermediation
T2 - Evidence from online debt crowdfunding
AU - Braggion, Fabio
AU - Manconi, Alberto
AU - Pavanini, Nicola
AU - Zhu, Haikun
PY - 2025/10
Y1 - 2025/10
N2 - Most online marketplaces are peer-to-peer. Credit ones, however, are not and they have resurrected many features of traditional financial intermediaries. To understand why, we use online credit as a laboratory to investigate the value of financial intermediation. We develop a structural model of online debt crowdfunding and estimate it on a novel database. We find that abandoning the peer-to-peer paradigm raises lender surplus, platform profits, and credit provision, but exposes investors to liquidity risk. A counterfactual where the platform resembles a bank by bearing liquidity risk can generate larger lender surplus and credit provision when liquidity is low and lenders are risk averse.
AB - Most online marketplaces are peer-to-peer. Credit ones, however, are not and they have resurrected many features of traditional financial intermediaries. To understand why, we use online credit as a laboratory to investigate the value of financial intermediation. We develop a structural model of online debt crowdfunding and estimate it on a novel database. We find that abandoning the peer-to-peer paradigm raises lender surplus, platform profits, and credit provision, but exposes investors to liquidity risk. A counterfactual where the platform resembles a bank by bearing liquidity risk can generate larger lender surplus and credit provision when liquidity is low and lenders are risk averse.
KW - Financial intermediation
KW - Marketplace credit
KW - Structural estimation
UR - https://www.webofscience.com/api/gateway?GWVersion=2&SrcApp=ceibs_wosapi&SrcAuth=WosAPI&KeyUT=WOS:001532875600001&DestLinkType=FullRecord&DestApp=WOS_CPL
U2 - 10.1016/j.jfineco.2025.104113
DO - 10.1016/j.jfineco.2025.104113
M3 - Journal
SN - 0304-405X
VL - 172
JO - Journal of Financial Economics
JF - Journal of Financial Economics
M1 - 104113
ER -