IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v45y2022ics1544612321002592.html
   My bibliography  Save this article

Financial contagion in internet lending platforms: Who pays the price?

Author

Listed:
  • Cheng, We Geng
  • Leite, Rodrigo de Oliveira
  • Caldieraro, Fabio

Abstract

By using data from a natural experiment, the 2015 Ezubao scandal in China, we show that as a consequence of negative news about a P2P financial platform, all players operating in a different platform (borrowers, lenders, and the platform itself) are worse-off due to information contagion. Moreover, we present evidence that high-income individuals and those that contracted loans for investment purposes are disproportionately affected by contagion from negative news.

Suggested Citation

  • Cheng, We Geng & Leite, Rodrigo de Oliveira & Caldieraro, Fabio, 2022. "Financial contagion in internet lending platforms: Who pays the price?," Finance Research Letters, Elsevier, vol. 45(C).
    • Handle: RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002592
    DOI: 10.1016/j.frl.2021.102187
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612321002592
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2021.102187?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Guo, Yanhong & Zhou, Wenjun & Luo, Chunyu & Liu, Chuanren & Xiong, Hui, 2016. "Instance-based credit risk assessment for investment decisions in P2P lending," European Journal of Operational Research, Elsevier, vol. 249(2), pages 417-426.
    2. Beatty, Anne & Liao, Scott & Yu, Jeff Jiewei, 2013. "The spillover effect of fraudulent financial reporting on peer firms' investments," Journal of Accounting and Economics, Elsevier, vol. 55(2), pages 183-205.
    3. Karpoff, Jonathan M. & Lee, D. Scott & Martin, Gerald S., 2008. "The Cost to Firms of Cooking the Books," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 43(3), pages 581-611, September.
    4. Sane, Renuka, 2019. "Stock market trading in the aftermath of an accounting scandal," Emerging Markets Review, Elsevier, vol. 40(C), pages 1-1.
    5. Yuan, Tian & Gupta, Rakesh, 2014. "Chinese Lunar New Year effect in Asian stock markets, 1999–2012," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(4), pages 529-537.
    6. Kim, Chan-Wung & Park, Jinwoo, 1994. "Holiday Effects and Stock Returns: Further Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 29(1), pages 145-157, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wen, Fenghua & Lin, Diyue & Hu, Lei & He, Shaoyi & Cao, Zhiling, 2023. "The spillover effect of corporate frauds and stock price crash risk," Finance Research Letters, Elsevier, vol. 57(C).
    2. Terence Tai-Leung Chong & Siqi Hou, 2021. "Will stock rise on Valentine’s Day?," Review of Behavioral Finance, Emerald Group Publishing Limited, vol. 14(5), pages 646-667, May.
    3. Cheng Yin & Xin Cheng & Yinan Yang & Dan Palmon, 2021. "Do Corporate Frauds Distort Suppliers’ Investment Decisions?," Journal of Business Ethics, Springer, vol. 172(1), pages 115-132, August.
    4. Sane, Renuka, 2019. "Stock market trading in the aftermath of an accounting scandal," Emerging Markets Review, Elsevier, vol. 40(C), pages 1-1.
    5. Der-Yuan Yang & Chen-Hsun Lee, 2016. "The solar and lunar divide and the impact on Taiwan’s stock returns," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1177153-117, December.
    6. Yang, Ann Shawing, 2016. "Calendar trading of Taiwan stock market: A study of holidays on trading detachment and interruptions," Emerging Markets Review, Elsevier, vol. 28(C), pages 140-154.
    7. Casalin, Fabrizio, 2018. "Determinants of holiday effects in mainland Chinese and Hong-Kong markets," China Economic Review, Elsevier, vol. 49(C), pages 45-67.
    8. Fan, Ying, 2023. "Collaborative integration, workplace flexibility and scholarly productivity: Evidence from the COVID-19 outbreak," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 1-15.
    9. Andrew Coutts & Christos Kaplanidis & Jennifer Roberts, 2000. "Security price anomalies in an emerging market: the case of the Athens Stock Exchange," Applied Financial Economics, Taylor & Francis Journals, vol. 10(5), pages 561-571.
    10. Pak Hung Au & Yuk‐Fai Fong & Jin Li, 2020. "Negotiated Block Trade And Rebuilding Of Trust," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 901-939, May.
    11. Salman Arif & John D. Kepler & Joseph Schroeder & Daniel Taylor, 2022. "Audit process, private information, and insider trading," Review of Accounting Studies, Springer, vol. 27(3), pages 1125-1156, September.
    12. Stephen Keef & Melvin Roush, 2005. "Day-of-the-week effects in the pre-holiday returns of the Standard & Poor's 500 stock index," Applied Financial Economics, Taylor & Francis Journals, vol. 15(2), pages 107-119.
    13. Wu, Fang & Cao, June & Zhang, Xiaosan, 2023. "Do non-executive employees matter in curbing corporate financial fraud?," Journal of Business Research, Elsevier, vol. 163(C).
    14. Ararat, Melsa & Yurtoglu, B. Burcin, 2021. "Female directors, board committees, and firm performance: Time-series evidence from Turkey," Emerging Markets Review, Elsevier, vol. 48(C).
    15. Gourieroux, Christian & Lu, Yang, 2019. "Least impulse response estimator for stress test exercises," Journal of Banking & Finance, Elsevier, vol. 103(C), pages 62-77.
    16. Wang, Tracy Yue & Winton, Andrew, 2021. "Industry informational interactions and corporate fraud," Journal of Corporate Finance, Elsevier, vol. 69(C).
    17. Lu Zhang & Yuan George Shan & Millicent Chang, 2021. "Can CSR Disclosure Protect Firm Reputation During Financial Restatements?," Journal of Business Ethics, Springer, vol. 173(1), pages 157-184, September.
    18. Curtis Nicholls, 2016. "The impact of SEC investigations and accounting and auditing enforcement releases on firms’ cost of equity capital," Review of Quantitative Finance and Accounting, Springer, vol. 47(1), pages 57-82, July.
    19. Liew, Venus Khim-Sen & Puah, Chin-Hong, 2020. "Chinese stock market sectoral indices performance in the time of novel coronavirus pandemic," MPRA Paper 100414, University Library of Munich, Germany, revised 28 Apr 2020.
    20. Samuel Jebaraj Benjamin, 2019. "The Effect of Financial Constraints on Audit Fees," Capital Markets Review, Malaysian Finance Association, vol. 27(2), pages 59-87.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002592. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.