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Investor attention and platform interest rate in Chinese peer-to-peer lending market

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  • He, Feng
  • Qin, Shuqi
  • Zhang, Xiaotao

Abstract

We focus on 224 big Peer-to-Peer(P2P) lending platforms from 2015 to 2019 to test whether investor attention affects the return in an online lending environment. As investors mainly obtain the platform information through Internet, we use Baidu search index as a proxy of investor attention. Empirical results show that investor attention will decrease the platform average projects’ interest rate by 15%, and this effect is considerably stronger for middle attention level platforms. The result is robust after controlling for the endogeneity caused by possible reverse causality.

Suggested Citation

  • He, Feng & Qin, Shuqi & Zhang, Xiaotao, 2021. "Investor attention and platform interest rate in Chinese peer-to-peer lending market," Finance Research Letters, Elsevier, vol. 39(C).
    • Handle: RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319313571
    DOI: 10.1016/j.frl.2020.101559
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    References listed on IDEAS

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    7. Wang, Yizhi & Lucey, Brian M. & Vigne, Samuel A. & Yarovaya, Larisa, 2022. "The Effects of Central Bank Digital Currencies News on Financial Markets," Technological Forecasting and Social Change, Elsevier, vol. 180(C).

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