P2P Loans and bank loans, the chicken and the egg, what causes what?: further evidence from a bootstrap panel granger causality test

Zan Zhang, Ken Hung and Tsangyao Chang

Applied Economics Letters, 2017, vol. 24, issue 19, 1358-1362

Abstract: This study attempts to re-investigate the causal link between bank loans and Peer-to-Peer (P2P) loans from China using data sets from eight areas (i.e., Beijing, Shanghai, Jiangsu, Zhejiang, Shandong, Hubei, Guangdong and Sichuan) over 2014M1-2016M4. We apply a bootstrap panel causality analysis that considers both cross-dependency and heterogeneity across cities. The empirical results indicate a unidirectional Granger causality running from P2P loans to bank loans for Beijing, Shanghai, Zhejiang and Shandong; feedback between P2P loans and bank loads for Jiangsu only and independence for the other three areas (i.e. Hubei, Guangdong and Sichuan).

Date: 2017
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DOI: 10.1080/13504851.2017.1279261

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