Journal of Northeastern University(Social Science) ›› 2015, Vol. 17 ›› Issue (2): 141-147.DOI: 10.15936/j.cnki.10083758.2015.02.006

• Economics and Management • Previous Articles     Next Articles

Effect of Borrowers Reputation on Borrowing CostBased on the P2P Lending Platform—paipai.com

QIAN Bing1,2   

  1. (1. Institute of Economics, Chinese Academy of Social Sciences, Beijing 100836, China; 2. School of Economics and Management, Changzhou Institute of Technology, Changzhou 213022, China)
  • Received:2015-06-12 Revised:2015-06-12 Online:2015-03-25 Published:2015-06-12
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Abstract: Based on 50000 micro data of the peer-to-peer (P2P) lending platform paipai.com from 2007 to 2013, this paper explored the effect of borrowers reputation on borrowing cost with propensity score matching (PSM). It was found that individuals of higher reputation have a significant advantage on borrowing cost compared to those of lower reputation, with the lending rate decreasing roughly by 0.02. The test results of different occupation and age groups showed that high reputation exerts a significant effect on borrowing cost as well, with the lending rate decreasing by 0.040~0.044 in occupation and 0.038~0.047 in age. Moreover, the information transmission mechanism of P2P platforms could effectively lower the degree of information asymmetry.

Key words: borrower, reputation, borrowing cost, propensity score matching (PSM)

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