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Social identity of civil servants and online peer-to-peer lending: Evidence from China

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  • Zhang, Man
  • Zhang, Zhiying
  • Tian, Xiujuan

Abstract

Using a novel dataset of 1,777,847 peer-to-peer (P2P) transactions between 2010 and 2017, we investigate how the social identity of Chinese civil servants affects P2P lending. The empirical results indicate that the social identity of civil servants leads to a higher probability of obtaining loans and a lower interest rate in P2P lending. Our results thus reveal that Chinese civil servants obtain considerable benefits in the P2P lending market compared with non-civil servants; these empirical results remain robust after considering sample selection bias.

Suggested Citation

  • Zhang, Man & Zhang, Zhiying & Tian, Xiujuan, 2023. "Social identity of civil servants and online peer-to-peer lending: Evidence from China," Economics Letters, Elsevier, vol. 229(C).
    • Handle: RePEc:eee:ecolet:v:229:y:2023:i:c:s0165176523002094
    DOI: 10.1016/j.econlet.2023.111184
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    References listed on IDEAS

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    1. Daniel J. Benjamin & James J. Choi & A. Joshua Strickland, 2010. "Social Identity and Preferences," American Economic Review, American Economic Association, vol. 100(4), pages 1913-1928, September.
    2. He, Qing & Li, Xiaoyang, 2021. "The failure of Chinese peer-to-peer lending platforms: Finance and politics," Journal of Corporate Finance, Elsevier, vol. 66(C).
    3. Xuchen Lin & Xiaolong Li & Zhong Zheng, 2017. "Evaluating borrower’s default risk in peer-to-peer lending: evidence from a lending platform in China," Applied Economics, Taylor & Francis Journals, vol. 49(35), pages 3538-3545, July.
    4. Agarwal, Sumit & Qian, Wenlan & Seru, Amit & Zhang, Jian, 2020. "Disguised corruption: Evidence from consumer credit in China," Journal of Financial Economics, Elsevier, vol. 137(2), pages 430-450.
    5. George A. Akerlof & Rachel E. Kranton, 2008. "Identity, Supervision, and Work Groups," American Economic Review, American Economic Association, vol. 98(2), pages 212-217, May.
    6. Jiang, Jinglin & Liao, Li & Wang, Zhengwei & Zhang, Xiaoyan, 2021. "Government Affiliation and Peer-To-Peer Lending Platforms in China," Journal of Empirical Finance, Elsevier, vol. 62(C), pages 87-106.
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    More about this item

    Keywords

    Social identity; Civil servants; P2P lending;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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