Abstract
Nowadays, internet lending has become an important model that cannot be ignored in China financial lending market. Based on the individual transaction data of Chinese Paipaidai website, this paper examines the existence, rationality, decline and heterogeneity of the imitation effect of lenders’ investment decisions in China internet lending market. It is found that the potential lenders’ investment decisions imitation effect in the internet lending market is influenced by the previous cumulative bid times and the previous cumulative fundraising amount. With the decrease of information transmitted by the characteristics of imitation effect, the follow-up imitation effect of potential lenders will become more and more rational, and the imitative effect will gradually decrease and eventually disappear after reaching a certain peak value, furthermore, the lenders’ investment decision imitation effect of loan orders with poor information disclosure is more prominent than that of orders with perfect information disclosure. The research shows that the imitation effect of lenders’ investment decisions is mainly related to incomplete information disclosure in the internet loan market, and the paper’s outcome is important for us to exhaustively understand the risk accumulation caused by lenders’ investment decisions imitation effect and how to solve the information disclosure mechanism problem effectively.
Highlights
Introduction and Literature ReviewSince the establishment of UK Zopa internet lending platform in 2005, internet lending market has been booming for more than ten years, compared with traditional finance, the emerging internet finance shows great superiority and universality, it greatly reduces the impact of traditional financial media
Zhang and Liu used Prosper data to study the imitation effect of investment decision-making of lenders in internet lending, the results showed that the imitation effect of investment decision-making in internet lending market is a rational behavior based on information transmission [7], the research is only a preliminary attempt, the research significance is very significant, Chen and Han believed that the US Prosper internet loan platform is quite different from the Chinese internet loan platform, for example, Prosper platform adopts interest rate bidding system, while China's internet lending platform is fixed interest rate system, the floating interest rate of the United States transmits little information value in China, it remains to be discussed whether the conclusion is established in China [8]
Based on predecessors' research results, this paper studies the existence, rationality, decline and heterogeneity of the imitation effect of investment decision-making in China's internet lending market with the help of Paipaidai website trading platform, through in-depth analysis, this paper finds that the lender's investment decision-making in the internet lending market has an imitation effect, and the imitation effect is a rational behavior, with the reduction of the amount of information transmitted by the imitation effect, this imitation effect shows a certain decreasing nature, in addition, the imitation effect of investment decision-making is different in intensity and duration for orders with different degree of information disclosure
Summary
Since the establishment of UK Zopa internet lending platform in 2005, internet lending market has been booming for more than ten years, compared with traditional finance, the emerging internet finance shows great superiority and universality, it greatly reduces the impact of traditional financial media. Zhang and Liu used Prosper data to study the imitation effect of investment decision-making of lenders in internet lending, the results showed that the imitation effect of investment decision-making in internet lending market is a rational behavior based on information transmission [7], the research is only a preliminary attempt, the research significance is very significant, Chen and Han believed that the US Prosper internet loan platform is quite different from the Chinese internet loan platform, for example, Prosper platform adopts interest rate bidding system, while China's internet lending platform is fixed interest rate system, the floating interest rate of the United States transmits little information value in China, it remains to be discussed whether the conclusion is established in China [8]. This paper makes a deep analysis of the imitation effect of investment decisions in China's internet loan market, it tried to clarify the intrinsic characteristics and correlative effect of the imitation effect, so as to provide the exact theoretical basis for the participants and regulators in the internet lending market to formulate relevant policy recommendations
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