Investor churn analysis in a P2P lending market

Dongwoo Kim

Applied Economics, 2020, vol. 52, issue 52, 5745-5755

Abstract: This study aims to determine why investors leave a peer-to-peer (P2P) lending market, and the pathways through which several factors affect investor churn. To this end, this study performed Cox proportional hazard and Kaplan-Meier survival analyses, as well as a linear regression analysis of data from Moneyauction, Korea’s first, but recently failed, P2P platform. The results show that investors’ investment patterns (i.e., investment frequency, amount, and method) affect churn directly or indirectly via investment profitability. This result supplements the findings in the stock market that the higher the trading frequency and volume are, the lower the returns are in the P2P lending market. Furthermore, this study is the first to cover the issue of investor churn in P2P lending markets and to reveal the detailed pathways of investors’ investment patterns in both the P2P and traditional financial markets in terms of profitability and churn.

Date: 2020
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DOI: 10.1080/00036846.2020.1770684

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