Why does regional information matter? evidence from peer-to-peer lending

Tong Wang, Sheng Zhao and Xin Shen

The European Journal of Finance, 2021, vol. 27, issue 4-5, 346-366

Abstract: In this paper, we study regional discrimination in a peer-to-peer lending scenario and provide novel empirical evidence for theories of soft information collection and information cost. We find that the regional information matters for borrowers' funding probabilities and that discrimination is profit-oriented or taste-oriented depending on the specific region. Moreover, using borrowers' birthplace as an instrumental variable, we find no evidence of genuine discrimination based purely on region in the peer-to-peer lending market.

Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:27:y:2021:i:4-5:p:346-366

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DOI: 10.1080/1351847X.2020.1720262

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