The value of financial intermediation: Evidence from online debt crowdfunding

Fabio Braggion, Alberto Manconi, Nicola Pavanini and Haikun Zhu

Journal of Financial Economics, 2025, vol. 172, issue C

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: Financial intermediation; Marketplace credit; Structural estimation (search for similar items in EconPapers)
JEL-codes: D14 D61 G21 G51 L21 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:172:y:2025:i:c:s0304405x25001217

DOI: 10.1016/j.jfineco.2025.104113

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