Risk and Revenue Management in the Chinese Auto Loan Industry

Jianping Peng, Wanli Liu, Zhenheng Huang, Dongmei Xu, Qinglei Cai and Jing ("Jim") Quan
Additional contact information
Jianping Peng: Sun Yat-sen University, China & Guangzhou Xinhua University, China
Wanli Liu: Sun Yat-sen University, China & Guangzhou Xinhua University, China
Zhenheng Huang: Guangzhou Xinhua University, China
Dongmei Xu: Guangzhou Xinhua University, China
Qinglei Cai: Southern Medical University, China
Jing ("Jim") Quan: Salisbury University, USA

Information Resources Management Journal (IRMJ), 2023, vol. 36, issue 1, 1-12

Abstract: The automobile consumption credit business promotes the development of the automobile industry. However, the current credit system in China requires further refinement. Thus, the credit loan business is associated with certain risks, and company profits are often negatively impacted by clients who default on loans. Based on the data, this article leverages the economic and financial theories of consumer credit risk control to construct a logistic model to predict customers' default probability. Then, a quadratic regression model is established to determine the optimal commission structure to balance profitability with incentives from retail stores. Results show that the macro-level variables are negatively associated with the probability of good behavior. The personal level variables exhibit a positive association. In addition, a negative coefficient in the quadratic profit equation indicates the presence of an inverted “U” relationship between profit and commission. Corresponding suggestions are put forward.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/IRMJ.323438 (application/pdf)

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:igg:rmj000:v:36:y:2023:i:1:p:1-12

Access Statistics for this article

Information Resources Management Journal (IRMJ) is currently edited by George Kelley

More articles in Information Resources Management Journal (IRMJ) from IGI Global
Bibliographic data for series maintained by Journal Editor ().