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Do private lending risks exacerbate urban economic imbalances? Evidence from 293 Chinese cities

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  • Fang, Xiaoqing
  • Guo, Huixiao
  • Huang, Shupei
  • Wang, Xinya

Abstract

This study constructs a private lending risk index based on unstructured text from court judgment data and investigates its impact on economic imbalances across 293 Chinese cities from 2010 to 2022. Results reveal that private lending risks significantly exacerbate urban economic imbalances, especially in central and western regions and in regions with weaker financial regulation and higher internet penetration. Moreover, the difference-in-differences analysis shows that after the peer-to-peer (P2P) lending crisis, urban economic imbalances are alleviated in regions with higher exposure to P2P lending risks.

Suggested Citation

  • Fang, Xiaoqing & Guo, Huixiao & Huang, Shupei & Wang, Xinya, 2025. "Do private lending risks exacerbate urban economic imbalances? Evidence from 293 Chinese cities," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612324017380
    DOI: 10.1016/j.frl.2024.106709
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