The impact of social capital on economic attitudes and outcomes

Iftekhar Hasan, Qing He () and Haitian Lu

Journal of International Money and Finance, 2020, vol. 108, issue C

Abstract: This article traces the extant literature on the impact of social capital on economic attitudes and outcomes. Special attention is paid to clarify conceptual ambiguities, measurement techniques, channels of influence, and identification strategies. Insights derived from the literature are then used to analyze the marketplace lending industry in China, where the size of the peer-to-peer (P2P) lending market is larger than that of the rest of the world combined. Ironically, approximately two-thirds of these online P2P lending platforms have failed. Empirical evidence from the monthly operating data of 735 lending platforms and transaction level data from one prominent platform (Renrendai) shows that platforms in provinces with high social capital have low risk of failure, and borrowers in provinces with high social capital can borrow at low interest rate and are less likely to default. We also provide observations to guide future economic research on social capital.

Keywords: Social capital; Peer-to-peer lending; Trust; China (search for similar items in EconPapers)
JEL-codes: G10 O16 Z10 Z13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:108:y:2020:i:c:s0261560620301017

DOI: 10.1016/j.jimonfin.2020.102162

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