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The role of job titles in online peer-to-peer lending: An empirical investigation on skilled borrowers

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  • Davaadorj, Zagdbazar
  • Enkhtaivan, Bolortuya
  • Lu, Wenling

Abstract

We examine the role of borrowers' job titles in the online peer-to-peer (P2P) lending market. Using the U.S. Occupational Information Network database, we define skilled borrowers as the borrowers with their job titles in Job Zone 5, a group of occupations requiring individuals with the most extensive skill, knowledge, education and related experience. Analyzing data from Lending Club, one of the largest P2P platforms in the US, we find evidence that skilled borrowers are perceived as trustworthy and receive lower loan interest rate and default less frequently than do their non-skilled peers. Consistent with the signaling framework, our empirical results suggest that borrowers with certain job titles send effective signals and trustworthy job titles affect lending decisions and performance. This study sheds new light on the importance of borrowers' job titles in P2P lending.

Suggested Citation

  • Davaadorj, Zagdbazar & Enkhtaivan, Bolortuya & Lu, Wenling, 2024. "The role of job titles in online peer-to-peer lending: An empirical investigation on skilled borrowers," Journal of Behavioral and Experimental Finance, Elsevier, vol. 41(C).
    • Handle: RePEc:eee:beexfi:v:41:y:2024:i:c:s2214635024000054
    DOI: 10.1016/j.jbef.2024.100890
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    More about this item

    Keywords

    Fintech lending; Peer-to-peer lending;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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