Abstract: Internet banking has significantly improved the total factor productivity of China′s commercial banks through the technology spillover effect. Based on the characteristics of network economy, the paper analyzes the resource allocation mechanism of Internet financial model with the two-side market theory, and compares the financing efficiency of traditional financial institutions and Internet financial platform; the data of more than 200 network lending platforms from October 2013 to February 2016 are collected to verify the resource allocation efficiency of network lending platform from transaction scale, transaction time and risk quality. The empirical results show that the crowding-out effect is obvious in the lender side, and demonstration effect is obvious in the borrower side. Accordingly, we should unify information disclosure standards of Internet financial platform, orderly guide reasonable market competition and strengthen comprehensive supervision of the platform.

Key words: Internet finance, network effect, platform efficiency, risk regulation