The role of narrative style in a peer-to-peer lending market: an empirical investigation

Xiaotao Zhang, Yuelei Li, Wei Zhang and Jieli Xing

Asia-Pacific Journal of Accounting & Economics, 2023, vol. 30, issue 1, 156-171

Abstract: Decision-making behavior can be capricious and may vary from individual to individual. This paper provides a straightforward method for the empirical identification of the narrative style affecting financial decisions under time pressure. Punctuation, Chinese characters and sentence length constitute different narrative styles. Using data from Renrendai, we find that as the number and type of punctuation marks in narratives increase, the loan funding and repayment performance increase. Also, as the number of characters and long sentences in narratives increases, loan funding increases, whereas loan performance suffers. These conclusions remain valid after robustness checks.

Date: 2023
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DOI: 10.1080/16081625.2021.1934707

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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