IT-Enabled Collective Prosocial Lending in Crisis Response: A Natural Experiment

Abstract

Crisis response has been regarded as an important component in coping with crises such as natural disasters or disease outbreaks. In particular, IT has played an essential role in facilitating the flow of information and financial resources during crisis response. One potential channel that has not been extensively studied within the context of crisis response is the emerging online collective prosocial lending platforms. To fill this gap, we draw on the literature on crisis response and online prosocial behavior and examine crowd lenders’ responses to crisis as well as the variations of their responses. Specifically, we propose that lenders respond positively to loans in crisis-affected areas, and that such responses are further shaped by contextual factors including loan value orientation and lenders’ cultural orientation. With field data from the largest prosocial lending platform and the 2014 Ebola outbreak as a natural experiment design, we find that lenders respond positively to loans in crisis-affected areas. Our results further suggest that lenders’ positive responses are stronger to loans with greater economic value orientation rather than social value orientation, and lenders in collectivistic cultures respond more positively than those from individualistic cultures to loans in crisis-affected areas. By investigating lenders’ behaviors during a crisis, we provide important implications for the literature on crisis response and prosocial behaviors, and for the officials in crisis management and prosocial lending platform.

Keywords: Crisis Response, Proposal Behavior, Collective Prosocial Lending, Value Orientation, Cultural Orientation, Natural Experiment