The value of financial intermediation: Evidence from online debt crowdfunding
Fabio Braggion, Alberto Manconi, Nicola Pavanini, Haikun Zhu
Journal of Financial Economics · 2025 · Volume 172
DOI: 10.1016/j.jfineco.2025.104113
Abstract
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.
Keywords
Marketplace credit, Structural estimation, Financial intermediation
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