Political perspectives and their impact on fintech mortgage lending adoption

Abstract

PurposeThe purpose of this paper is to explore the link between political perspectives and the adoption of financial technology (fintech) mortgage lending, a new type of mortgage lending facilitated by online platforms.Design/methodology/approachThe authors use fintech mortgage lending and presidential election data for the United States of America (USA) counties from 2010 to 2017. Employing several analysis techniques including ordinary least squares (OLS) regressions and propensity score matching (PSM) methodology, the authors test whether political views are related to fintech mortgage lending, after controlling for other county characteristics including population, unemployment rate, median income, median age, minority ratio and education.FindingsThe authors find that a higher tendency toward Republican views is positively associated with adoption rates of fintech mortgages. The empirical results are supported by Republican ideology, which advocates for deregulation and market-driven solutions, as well as an increasing skepticism among Republicans toward traditional banking and financial institutions.Originality/valueThis paper contributes to the growing body of literature on fintech credit. By focusing on political views to explain the adoption of fintech mortgage lending – a recent and potentially disruptive innovation – the authors provide new insights into the dynamics within fintech credit markets.