Herding Behavior in Online Microloan Markets: Evidence from China
نویسندگان
چکیده
Lenders’ herding behavior in the peer-to-peer (P2P) lending platform in China is examined. Based on the data from PPdai.com, the largest online P2P lending market in China, we found that herding behavior is salient in P2P lending market in China, and such herding is associated with higher default rate. Keyword: Rational herding, information cascade, peer-to-peer online lending
منابع مشابه
Rational Herding in Microloan Markets Online Appendix
In the empirical analysis we identify herding by documenting sequential correlation of lending decisions after controlling for listing heterogeneity and payoff externalities. We then distinguish rational herding from irrational herding based on the premise that publicly observable listing attributes should moderate the herding momentum if lenders are rational observational learners. In this sec...
متن کاملRational Herding in Microloan Markets
Microloan markets allow individual borrowers to raise funding from multiple individual lenders. We use a unique panel dataset which tracks the funding dynamics of borrower listings on Prosper.com, the largest microloan market in the United States. We find evidence of rational herding among lenders. Well-funded borrower listings tend to attract more funding after we control for unobserved listin...
متن کاملAn empirical analysis of herd behavior in global stock markets
This paper examines herding behavior in global markets. By applying daily data for 18 countries from May 25, 1988, through April 24, 2009, we find evidence of herding in advanced stock markets (except the US) and in Asian markets. No evidence of herding is found in Latin American markets. Evidence suggests that stock return dispersions in the US play a significant role in explaining the non-US ...
متن کاملDynamic herding behavior in Pacific-Basin markets: Evidence and implications
This study examines investor herding behavior in Pacific-Basin equity markets. We find that herding is present in both rising and falling markets. Importantly, the level of herding is time-varying. We also find that herding is positively related to stock returns, but negatively related to market volatility. Herding estimates across markets are positively correlated, signifying co-movement of in...
متن کاملHerding Behavior In Online P2P Lending: An Empirical Investigation
We study lender behavior in the peer-to-peer (P2P) lending market, where individuals bid on unsecured microloans requested by other individual borrowers. Online P2P exchanges are growing, but lenders in this market are not professional investors. In addition, lenders have to take big risks because loans in P2P lending are granted without collateral. While the P2P lending market shares some char...
متن کامل