Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238437 
Year of Publication: 
2020
Series/Report no.: 
ADBI Working Paper Series No. 1080
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
The paper investigates the role of network centrality in predicting borrowers' and lenders' behavior in peer-to-peer (P2P) lending. The empirical analysis of data from Renrendai, a leading lending platform in the People's Republic of China, reveals that the lenders who are at the center of a network not only invest larger amounts but also invest more swiftly than their peers, reflecting the information advantage arising from their position in the network. Furthermore, the borrowers who are at the center of a network are able to borrow at lower interest rates and with higher success rates. At the same time, they are less likely to default. These findings imply that, in the P2P lending market, network linkages not only enhance market efficiency but also encourage reputation protection.
Subjects: 
network centrality
social networks
peer-to-peer lending
lending behavior
loan outcomes
JEL: 
C21
C58
E44
G21
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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