How do reputation, structure design and FinTech ecosystem affect the net cash inflow of P2P lending platforms? Evidence from China

Xueru Chen (), Xiaoji Hu () and Shenglin Ben ()
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Xueru Chen: Zhejiang University
Xiaoji Hu: Renming University of China
Shenglin Ben: Zhejiang University

Electronic Commerce Research, 2021, vol. 21, issue 4, No 7, 1055-1082

Abstract: Abstract Based on daily data of 749 active online P2P lending platforms in Chinese market, this study explores the key factors affecting the net cash inflow rate of the platform which is vital for its operation and survival from the perspective of reputation, structure design and FinTech ecosystem. Internal governance issues of P2P lending platforms are further discussed according to the model results. A positive U-shaped relationship has been found between the platform duration and its net cash inflow rate which proves the role of reputation in the long-term development of P2P lending platforms. In addition, we demonstrate that both capital and operational structure design of the platform (e.g. shareholders background, credit assignment, trusteeship and guarantee) have a significant impact on the platform’s net cash inflow rate. The cash flow level of the platform has also been affected by the regional FinTech ecosystem. Platforms in a medium-developing ecosystem may have the highest net cash inflow rate, while a backward ecosystem will lower the cash flows of the platforms located in this area on average. Some suggestions on cash flow management and internal governance of P2P lending platforms for both platform founders and governments are put forward in the end of the study.

Keywords: P2P lending; Cash flow; Reputation; Structure design; Ecosystem (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10660-020-09400-9

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