Borrower platform choice: The influencing factors on herding

Yingxiu Zhao, Wei Zhang, Pengfei Wang and Dehua Shen
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Yingxiu Zhao: College of Management and Economics, Tianjin University, Tianjin, P. R. China
Wei Zhang: College of Management and Economics, Tianjin University, Tianjin, P. R. China†China Center for Social Computing and Analytics, Tianjin University, Tianjin, P. R. China
Pengfei Wang: College of Management and Economics, Tianjin University, Tianjin, P. R. China

International Journal of Financial Engineering (IJFE), 2020, vol. 07, issue 01, 1-12

Abstract: Based on the unique data from a popular P2P website in China, this paper investigates the borrowers’ herding behavior and its influencing factors, e.g., platform attribute and moderating events. We mainly find that: (i) there exists herding behavior at the platform level and that the loan amount, loan interest rate and loan duration are positively related to the magnitude of herding; (2) the borrowers’ herding behavior is increased by a platform’s market share and the number of participants; (3) regulatory events have negative effects on the herding behavior. Our findings have practical implications for P2P participants, platforms, and policymakers.

Keywords: Herding behavior; P2P lending platforms; borrowers; moderating events (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S2424786320500024

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