The Expansion of Peer-to-Peer Lending

Olena Havrylchyk, Carlotta Mariotto, Talal Rahim and Marianne Verdier ()
Additional contact information
Carlotta Mariotto: European Commission [Brussels], Oxera Consulting, Milan, Italy
Talal Rahim: ESCP Business School [Madrid]
Marianne Verdier: CRED - Centre de Recherche en Economie et Droit - UP2 - Université Panthéon-Assas, CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We use data from the two leading US platforms, Prosper and Lending Club, to explore the drivers of the growing consumer demand for peer-to-peer (P2P) credit. Despite the online nature of new entrants, we rely on the spatial autoregressive model because spatial effects play an important role. Our findings suggest that the initial growth of P2P lending was spurred by the global financial crisis, but its growth after 2011 occurred in counties that were underserved by bank branches. The growth of P2P lending is slower in counties with high bank concentration and this factor is the most robust, stable over time and economically important in our study. Counties with lower population density, lower share of educated and young people experience lower growth of P2P lending, consistent with the hypothesis that learning costs deter the entry of new entrants.

Keywords: peer-to-peer lending; market structure; barriers to entry; financial crisis; information and communication technologies; credit market (search for similar items in EconPapers)
Date: 2021-06-26
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Review of Network Economics, 2021, 19 (3), pp.145-187. ⟨10.1515/rne-2020-0033⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: The Expansion of Peer-to-Peer Lending (2021)
Journal Article: The Expansion of Peer-to-Peer Lending (2020)
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:hal:cesptp:hal-04120408

DOI: 10.1515/rne-2020-0033

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().