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Borrower platform choice: The influencing factors on herding

Author

Listed:
  • Yingxiu Zhao

    (College of Management and Economics, Tianjin University, Tianjin, P. R. China)

  • Wei Zhang

    (College of Management and Economics, Tianjin University, Tianjin, P. R. China†China Center for Social Computing and Analytics, Tianjin University, Tianjin, P. R. China)

  • Pengfei Wang

    (College of Management and Economics, Tianjin University, Tianjin, P. R. China)

  • Dehua Shen

    (College of Management and Economics, Tianjin University, Tianjin, P. R. China†China Center for Social Computing and Analytics, Tianjin University, Tianjin, P. R. China)

Abstract

Based on the unique data from a popular P2P website in China, this paper investigates the borrowers’ herding behavior and its influencing factors, e.g., platform attribute and moderating events. We mainly find that: (i) there exists herding behavior at the platform level and that the loan amount, loan interest rate and loan duration are positively related to the magnitude of herding; (2) the borrowers’ herding behavior is increased by a platform’s market share and the number of participants; (3) regulatory events have negative effects on the herding behavior. Our findings have practical implications for P2P participants, platforms, and policymakers.

Suggested Citation

  • Yingxiu Zhao & Wei Zhang & Pengfei Wang & Dehua Shen, 2020. "Borrower platform choice: The influencing factors on herding," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-12, March.
    • Handle: RePEc:wsi:ijfexx:v:07:y:2020:i:01:n:s2424786320500024
    DOI: 10.1142/S2424786320500024
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    References listed on IDEAS

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