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Network topology and systemic risk in Peer-to-Peer lending market

Author

Listed:
  • Li, Yuelei
  • Hao, Aiting
  • Zhang, Xiaotao
  • Xiong, Xiong

Abstract

Peer-to-Peer lending market is presented as a complex network and its topology characteristics, such as the ratio of brokers’ connections, degree, ratio of available node pairs, betweenness centrality, network density, network efficiency and edges’ loading ability have been investigated in this paper. The main contribution of this paper is that modeling and analyzing the systemic risk in P2P lending market in the view point of complex network based on these topology characteristics. And the empirical research has been carried out by using the real data from one of the largest online platforms in China (www.renrendai.com). Result shows that the relationship between lending–borrowing network topology and the default loans is significant, which implies that these factors have strong relations to systemic risk in the network.

Suggested Citation

  • Li, Yuelei & Hao, Aiting & Zhang, Xiaotao & Xiong, Xiong, 2018. "Network topology and systemic risk in Peer-to-Peer lending market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 508(C), pages 118-130.
    • Handle: RePEc:eee:phsmap:v:508:y:2018:i:c:p:118-130
    DOI: 10.1016/j.physa.2018.05.083
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