 Rating manipulation and creditworthiness for platform economy: Evidence from peer-to-peer lendingYezhou Sha International Review of Financial Analysis, 2022, vol. 84, issue C Abstract: Credit rating provides essential information on a project's credit risk to both lenders and borrowers. On exploring over five million lending listings from a leading peer-to-peer (P2P) lending platform, a mismatch phenomenon was observed between credit rating and default probability of P2P listings across different credit rating groups, despite controlling for common credit-related characteristics. Further looking into the misevaluation of credit risk, it was found that this phenomenon was more pronounced when an unexpected intervention was likely to be applied in rating projects, such as listings with high credit ratings, large loan amounts, and less personal information. The study results question the credibility of related research that uses internal credit ratings, because this variable is likely to be manipulated by the platform. Keywords: Peer-to-peer lending; Credit risk; Rating manipulation; Fintech; Financial inclusion (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:84:y:2022:i:c:s105752192200343x DOI: 10.1016/j.irfa.2022.102393 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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