A clientele effect in online lending markets: Evidence from the comovement between investor sentiment and online lending rates

Rongda Chen, Guorui Xu, Feng Xu, Chenglu Jin and Jingjing Yu

Journal of International Financial Markets, Institutions and Money, 2022, vol. 76, issue C

Abstract: This paper examines how online lending investor sentiment (OLIS) and investors’ heterogeneous requirements on online lending platforms’ compliance interact to affect online lending rates. Online lending platforms can be divided into different groups according to their compliance clientele, such as state-capital-platforms, listed-company-platforms, banking-platforms, venture-capital-platforms and private-platforms. Using data of platform characteristics and online lending rates in China, we find that online lending investor sentiments and online lending rates vary across the five groups of online lending platforms. Thus, there will be misleading if we use the investor sentiment constructed based on the whole online lending market to study the comovement between investor sentiment and online lending rates of each classification of platforms. We further find the evidence on the clientele effect in online lending market. Particularly, investor sentiment has less impact on online lending rates among platforms invested by investors with stronger requirement on the platforms’ compliance.

Keywords: Compliance clientele; Investor sentiment; Online lending platform; Online lending rates (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:76:y:2022:i:c:s1042443121001682

DOI: 10.1016/j.intfin.2021.101461

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