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How Firms' Ownership Structure Impacts Online Peer-to-Peer Lending Performance in China

Author

Listed:
  • Guangying Xie

    (College of Economics and Management, Zhoukou Normal University, Zhoukou 466001, China)

Abstract

A dramatic surge in online peer-to-peer (P2P) lending emerged in China, where (under conditions of credit deficiency) it took only three years for the size of the P2P lending market in China to reach four times that of the United States and ten times that of the United Kingdom. The literature indicates that ownership structure is an important factor that influences P2P lending firms?performance, while research on the underlying mechanisms remain insufficient. This study analyzes the data of P2P lending companies between June 2016 and March 2017. The results demonstrate that although ownership structure has minimal direct effect on the turnover volume and number of lenders and borrowers, it moderates the effects of firm age, interest rate, and loan term on firm performance. These results enrich the property theory and shed light on how P2P lending firms with different ownership structures could succeed when there is institutional deficiency.

Suggested Citation

  • Guangying Xie, 2020. "How Firms' Ownership Structure Impacts Online Peer-to-Peer Lending Performance in China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 15(1), pages 70-102, March.
    • Handle: RePEc:fec:journl:v:15:y:2020:i:1:p:70-102
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-011-020-0004-0
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    Cited by:

    1. Kevin X. D. Huang & Zhe Li & Jianfei Sun, 2021. "Lending Competition And Loan Sales: A Macroeconomic Analysis Under Directed Search," Economic Inquiry, Western Economic Association International, vol. 59(2), pages 648-661, April.

    More about this item

    Keywords

    online peer-to-peer (P2P) lending; firm performance; ownership structure; credit deficiency; microfinance; institutional entrepreneurship;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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