The Nexus of Peer-to-Peer Lending and Monetary Policy Transmission: Evidence from the People’s Republic of China

Nuobu Renzhi () and John Beirne
Additional contact information
Nuobu Renzhi: Capital University of Economics and Business

No 749, ADB Economics Working Paper Series from Asian Development Bank

Abstract: This paper empirically investigates how the level of peer-to-peer (P2P) lending affects monetary policy transmission in the People’s Republic of China (PRC). Using state-dependent local projection methods, we find that the macroeconomic effects of unanticipated changes in monetary policy are dampened during the boom phase of the P2P lending market. The impulse responses of industrial production and inflation are significantly negative in the non-boom state. In contrast, the responses of industrial production and inflation are muted in the boom state. Set against the context of stricter regulation on P2P lending since 2017, our results indicate that the significant scaling back of P2P lending activity and its gradual decline in the PRC could enhance the effectiveness of monetary policy transmission. Our paper also suggests that further work is needed to study the interaction between financial innovation and monetary policy

Keywords: peer-to-peer lending; monetary policy transmission; fintech (search for similar items in EconPapers)
JEL-codes: E44 E52 F33 F42 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2024-11-05
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cna, nep-fdg, nep-mon, nep-opm and nep-pay
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.adb.org/publications/p2p-lending-monetary-policy-transmission-prc Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0749

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().