Government Affiliation and Peer-to-Peer Lending Platforms in China
55 Pages Posted: 14 Feb 2018 Last revised: 21 May 2019
Date Written: May 20, 2019
With thousands of co-existing and competing platforms, the Chinese peer-to-peer (P2P) lending market experienced both high growth and high failure rate. We hand collect unique data for these P2P platforms and investigate the differences in performance and survival for platforms with and without affiliations with state-owned enterprises (SOEs). P2P platforms with SOE affiliations have higher trading volumes, attract more investors, and offer lower interest rates. These platforms also have significantly better survivability than those without the SOE affiliations, especially during market downturns. These results can be helpful to investors and regulators, especially those from other emerging markets.
Keywords: Peer-to-Peer Lending Platforms, Fintech, Government Affiliation, State-Owned Enterprise, Emerging Markets
JEL Classification: G21, G28, O3
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