Complements Rather Than Substitutes: An Empirical Examination of Cryptocurrency and Online Peer-to-Peer Lending Markets

58 Pages Posted: 16 Oct 2018 Last revised: 26 Aug 2019

See all articles by Sunghun Chung

Sunghun Chung

Santa Clara University - Leavey School of Business

Keongtae Kim

Decision Science and Managerial Economics, Chinese University of Hong Kong

Chul Ho Lee

KAIST

Date Written: August 26, 2019

Abstract

The authors develop a conceptual framework and derive testable predictions regarding effects of cryptocurrency markets on borrowers in peer-to-peer (P2P) lending markets from January 2017 to February 2019. Results indicate that the growth in cryptocurrency markets is associated with increased loan requests in the P2P market, especially for borrowers with good credit ratings, more knowledge about the cryptocurrency market, and likely to borrow for investing purposes. The findings imply that the P2P lending market is potentially a funding source for investment in the cryptocurrency market. The growth in cryptocurrency markets is further associated with low default and interest rates. The study has unique and important implications for theory and practice regarding the appropriate management of crowdfunding platforms to sustain a new wave of financial technology.

Keywords: Cryptocurrency, Online Peer-to-Peer Lending, FinTech, Cross-Platform, Complementarity

JEL Classification: G10, M15, M21, G11

Suggested Citation

Chung, Sunghun and Kim, Keongtae and Lee, Chul Ho, Complements Rather Than Substitutes: An Empirical Examination of Cryptocurrency and Online Peer-to-Peer Lending Markets (August 26, 2019). Available at SSRN: https://ssrn.com/abstract=3254091 or http://dx.doi.org/10.2139/ssrn.3254091

Sunghun Chung (Contact Author)

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Keongtae Kim

Decision Science and Managerial Economics, Chinese University of Hong Kong ( email )

12 Chak Cheung street
Shatin
Hong Kong

Chul Ho Lee

KAIST ( email )

Daehak-ro
Yuseong-gu
Taejon, 34141
Korea, Republic of (South Korea)

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