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Pricing in the online invoice trading market: First empirical evidence

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  • Dorfleitner, Gregor
  • Rad, Jacqueline
  • Weber, Martina

Abstract

In recent years, online invoice trading has gained importance in providing SMEs with short-term financing. In this paper, we present first empirical evidence concerning the question whether the risk of payment difficulties is appropriately reflected in the pricing variables. To this end, we investigate predictors of default of online invoice trading platforms. We analyze both the probability of default and the loss rate and find that the interest rate, the duration and the percentage funded have good predictive power. Furthermore, we show that the pricing mechanism (auction vs. fixed prices) helps to explain defaults on online invoice trading platforms.

Suggested Citation

  • Dorfleitner, Gregor & Rad, Jacqueline & Weber, Martina, 2017. "Pricing in the online invoice trading market: First empirical evidence," Economics Letters, Elsevier, vol. 161(C), pages 56-61.
    • Handle: RePEc:eee:ecolet:v:161:y:2017:i:c:p:56-61
    DOI: 10.1016/j.econlet.2017.09.020
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    References listed on IDEAS

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    Cited by:

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    2. Chen, Rongda & Chen, Yikai & Jin, Chenglu & Xu, Guorui & Bao, Weiwei & Guo, Kenan, 2021. "Characteristics and mechanisms of not-fully marketized interest rates: Evidence from Chinese online lending," Research in International Business and Finance, Elsevier, vol. 55(C).

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