CAUSALITY BETWEEN PEER-TO-PEER LENDING AND BANK LENDING IN CHINA: EVIDENCE FROM A PANEL DATA APPROACH

Tsung-Pao Wu, Hung-Che Wu (), Shu-Bing Liu (), Hsin-Pei Hsueh () and Chien-Ming Wang ()
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Tsung-Pao Wu: School of Accounting and Finance, Beijing Institute of Technology, Zhuhai No. 6 Jinfeng Road, Tangjiawan, Zhuhai City, Guangdong Province, China 519088, China
Hung-Che Wu: Business School, Nanfang College of Sun Yat-Sen University, No. 882 Wenquan Avenue, Conghua District, Guangzhou City, Guangdong Province, China 510970, China
Shu-Bing Liu: Department of Finance, Shih Chien University Kaohsiung Campus, 200 University Road, Neimen, Kaohsiung City, Taiwan 84550, Taiwan
Hsin-Pei Hsueh: School of Finance, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiang-xia District, Wuhan City, Hubei Province, China 430205, China
Chien-Ming Wang: School of Economics and Trade, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiang-xia District Wuhan City, Hubei Province, China 430205, China

The Singapore Economic Review (SER), 2020, vol. 65, issue 06, 1537-1557

Abstract: This study applied a multivariate panel Granger causality test to examine the causal relationship between peer-to-peer lending (P2PL) and bank lending (BL) in China’s eight major regions for the period from 2014M01 to 2019M12. The empirical results of this paper support evidence for the P2PL leading hypothesis in regions such as Jiangsu and Hubei while the BL leading hypothesis relationship supports the evidence for regions such as Zhejiang and Shanghai. In addition, there is an interactive causal relationship between P2PL and BL in a region such as Shandong. However, the result of a neutrality hypothesis supports three of these eight major regions (Guangdong, Beijing and Sichuan). The findings of this paper provide important policy implications for China’s eight major regions as well as business sectors in the banking industry for understanding and predicting market conditions.

Keywords: P2PL; BL; bootstrap multivariate panel Granger causality; China (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S0217590820500332

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