 Migrants and default: Evidence from ChinaJianwen Li and Jinyan Hu International Review of Finance, 2022, vol. 22, issue 3, 472-505 Abstract: Reform and opening up have stimulated internal migration; at the same time, home bias and regional discrimination have become pressing problems in China, even though the internet has reduced distance‐related informational frictions. Evidence from an emerging peer‐to‐peer lending platform shows that migration statuses can reveal additional information about borrowers' credit risk. Ceteris paribus, migrants, interprovincial migrants, upward‐moving migrants, and long‐distance migrants are less likely to default; this is especially true for migrants with stronger educational backgrounds and work experience. Further analyses show that migrants tend to have higher credit quality, lower financing costs, and better economic attributes and assimilate themselves to a higher trusted culture, allowing them to default less than nonmigrants. This means that lenders and trading platforms may rely on the informative content of migration to adjust their lending policies in a fashion that attracts more participation from creditworthy migrants. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:irvfin:v:22:y:2022:i:3:p:472-505 Ordering information: This journal article can be ordered from Access Statistics for this article International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman More articles in International Review of Finance from International Review of Finance Ltd. |
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