Do financial regulations have impacts on ownership structure of P2P firms?

Lo, Kai Lisa; Mi, Jackson Jinhong; Yang, Minhua; Zhang, Shuyu

doi:10.1080/13504851.2019.1675859

Cited by 6 publications

(4 citation statements)

References 12 publications

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“…For instance, P2P lending platforms are able to alleviate financial exclusion (Zhong & Jiang, 2020), increase the availability of financial services, when the number of bank branches decreases in a rural community (Maskara et al, 2021), carve up the market share of bank loan in China (Zhang et al, 2017) and thus negatively affect bank performance (Phan et al, 2019). However, after the appearance of financial innovation regulations, a large amount of smaller P2P lending platforms under‐perform (Lo et al, 2020) and finally disappear after 2018. Therefore, those firms investing in P2P platforms may be negatively affected and some of them may end up withdrawing investments, which leads to the first and second hypothesis.H1 Financial innovation regulations are negatively associated with firm performance .H2 Financial innovation regulations are negatively associated with firm performance for those firms investing in P2P lending platforms in China .…”

Section: Institutional Background and Literature Reviewmentioning

confidence: 99%

“…Unlike these studies, this paper establishes the link between financial innovation regulations and firm performance. Second, in the context of China, the impacts of financial innovation regulations on the bank loan (Zhang et al, 2017), P2P lending platforms (Lo et al, 2020) and market reactions (Yang & He, 2019) have been investigated; however, the effects of financial innovation regulations on firm performance has been under-researched. This study fills in the research gap and shows that such impacts of financial innovation regulations on firm performance may be attributed to the investments in P2P platforms and financial constraints.…”

Section: Introductionmentioning

confidence: 99%

“…Financial innovation regulations combine these two components, financial regulations and financial innovation and those regulations tend to have significant market reactions (Yang & He, 2019) and are able to affect the ownership structure of related firms, for instance, the peer‐to‐peer (P2P) lending platforms (Lo et al, 2020). Financial innovation regulations aim to regulate the application of financial innovation and alleviate related risks.…”

Section: Introductionmentioning

confidence: 99%

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Financial innovation regulations and firm performance: Evidence from Chinese listed firms

Yang

2021

Australian Economic Papers

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This study investigates the impacts of financial innovation regulations on Chinese listed firms in the period of 2008 to 2020, which comes to the theoretical contribution of this paper. These regulations introduced in 2016 mainly focus on the peer-to-peer (P2P) lending platforms in this country and tend to be negatively associated with firm performance, especially for those firms investing in the P2P lending platforms, as a large amount of P2P lending platforms with unfavourable performance disappear in recent years, which may end up negatively affecting those firms investing in them.Survived P2P lending platforms tend to be stronger, then become a type of substitute of traditional banks and are able to carve up the market share of bank. The latter therefore has to increase credit supply to maximise profits, which leads to the access to more credits and therefore worse firm performance, especially for those firms with financial constraints in terms of the cash-cash flow sensitivity. The empirical results are robust to the potential endogeneity issue of financial constraints. Larger firms and state-owned enterprises (SOEs) tend to have better performance, implying that authorities may take actions for smaller firms (non-SOEs) to offset the negative impacts of financial innovation regulations they suffer and achieve better implementation of financial innovation regulations, which comes to the practical contribution of this paper.

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Section: Institutional Background and Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Financial innovation regulations and firm performance: Evidence from Chinese listed firms

Yang

2021

Australian Economic Papers

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“…In recent years, issues about the behaviour of P2P lending participants have received increasing attention, but it is still in its early stages. First, most researchers are keen to study the herding behaviour in the P2P [13][14][15], defaulting behaviour of borrowers in P2P lending [16,17], and operational behaviour of P2P lending platforms [18]. ese studies generally focus on the characteristic and influencing factors of the behaviour of a single participant, but the interactions with each other of P2P lending participants with regard to the operations are ignored.…”

Section: Introductionmentioning

confidence: 99%

Evolutionary Game Analysis of Three Players on Behavioural Strategy of P2P Lending Participants: A Sustainable Operations Perspective

et al. 2021

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In China, most of peer-to-peer (P2P) lending platforms do not possess operational sustainability due to excessive defaults. To address this problem, the conflict of interests among P2P lending participants is discussed using a stakeholder approach. An evolutionary game model (EGM) of three players is developed to analyse the interactions among regulatory authorities, P2P lending platforms, and borrowers. Then, the asymptotic of the equilibrium and evolutionary stability strategies of the EGM are analysed. Results indicate that either the P2P lending platforms or borrowers will choose “noncompliant operation” or “default” strategies from a short-term perspective, and the strict supervision of the P2P lending platform in the short term is necessary for the sustainable operation of the platform. When supervision is intensified in the early stage and regulatory pressure becomes a normal state, P2P lending platforms and borrowers will actively select “compliant operation” and “repayment” strategies even if there is a lack of regulation in the future. Meanwhile, the behavioural strategies of P2P lending participants can be changed to conform to the sustainability of P2P lending by reducing the costs of strict supervision and increasing the damage caused by general supervision, reward and punishment coefficient for P2P lending platforms, repayment incentives of borrowers, and defaulting opportunity costs. Finally, suggestions for regulating the behaviours of P2P lending participants and promoting sustainability of P2P lending industry are discussed.

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A study on default prediction of Chinese online lending: based on the analysis of mobile phone usage data

Ouyang

Zhi

2020

Applied Economics Letters

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Do financial regulations have impacts on ownership structure of P2P firms?

Cited by 6 publications

References 12 publications

Financial innovation regulations and firm performance: Evidence from Chinese listed firms

Financial innovation regulations and firm performance: Evidence from Chinese listed firms

Evolutionary Game Analysis of Three Players on Behavioural Strategy of P2P Lending Participants: A Sustainable Operations Perspective

A study on default prediction of Chinese online lending: based on the analysis of mobile phone usage data

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