The Value of Financial Intermediation: Evidence from Online Debt Crowdfunding

Fabio Braggion, Alberto Manconi, Nicola Pavanini and Haikun Zhu

No 14740, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Whereas many online marketplaces are fundamentally peer-to-peer, credit ones sell diversified loan portfolios characterized by maturity mismatch, a traditional feature of financial intermediation. To understand why, we develop a structural model of online debt crowdfunding and estimate it on a novel database from a large Chinese platform. 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 generates larger lender surplus and credit provision when liquidity is low. More generally, our results shed light on how financial intermediation creates value.

Keywords: Marketplace credit; Chinese financial system; Structural estimation (search for similar items in EconPapers)
JEL-codes: D14 D61 G21 G51 L21 (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-ban and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP14740 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14740

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14740

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().