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Volume 16
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10.4067/S0718-18762021000100105
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Journal of Theoretical and Applied Electronic Commerce Research is published by MDPI from Volume 16 Issue 3 (2021). Previous articles were published by another publisher in Open Access under a CC-BY 3.0 licence, and they are hosted by MDPI on mdpi.com as a courtesy and upon agreement with Faculty of Engineering of the Universidad de Talca.
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Article

How Individual Investors React to Negative Events in the FinTech Era? Evidence from China’s Peer-to-Peer Lending

by
Xueru Chen
1,
Xiaoji Hu
2 and
Shenglin Ben
3
1
Zhejiang University, School of Management, Hangzhou, China
2
Renming University of China, School of Finance, Beijing, China
3
Zhejiang University, School of Management & International Business School, Hangzhou, China
J. Theor. Appl. Electron. Commer. Res. 2021, 16(1), 52-70; https://doi.org/10.4067/S0718-18762021000100105
Submission received: 11 August 2019 / Revised: 6 February 2020 / Accepted: 15 February 2020 / Published: 28 September 2020
Versions Notes

Abstract

Inexperienced individual investors are the main players in the emerging FinTech industry, and also suffer from frequent negative events in the markets. With 3,110 negative events and 467,594 transaction data of China’s peer-to-peer lending market from 2015 to 2018, this paper analyzes how different types of platform negative events affect the decision-making of individual investors. We find that individual investors only have a significant negative reaction to moral hazard exposure events such as platforms absconding, with relatively ignorance of other types of negative events. The negative effect is rapid but short-lived, and shows differences among platforms of different background and attributes. By the mediation analysis, we find that public attention can be a mediator and explain the pattern of the impact that absconding events have on individual investors. Related risk prevention, regulation, investor education issues are discussed and further suggestions are also put forward for both individual investors and regulators.
Keywords: Peer-to-peer lending, Negative events, Platform absconding, Public attention, Mediation analysis Peer-to-peer lending, Negative events, Platform absconding, Public attention, Mediation analysis

Share and Cite

MDPI and ACS Style

Chen, X.; Hu, X.; Ben, S. How Individual Investors React to Negative Events in the FinTech Era? Evidence from China’s Peer-to-Peer Lending. J. Theor. Appl. Electron. Commer. Res. 2021, 16, 52-70. https://doi.org/10.4067/S0718-18762021000100105

AMA Style

Chen X, Hu X, Ben S. How Individual Investors React to Negative Events in the FinTech Era? Evidence from China’s Peer-to-Peer Lending. Journal of Theoretical and Applied Electronic Commerce Research. 2021; 16(1):52-70. https://doi.org/10.4067/S0718-18762021000100105

Chicago/Turabian Style

Chen, Xueru, Xiaoji Hu, and Shenglin Ben. 2021. "How Individual Investors React to Negative Events in the FinTech Era? Evidence from China’s Peer-to-Peer Lending" Journal of Theoretical and Applied Electronic Commerce Research 16, no. 1: 52-70. https://doi.org/10.4067/S0718-18762021000100105

APA Style

Chen, X., Hu, X., & Ben, S. (2021). How Individual Investors React to Negative Events in the FinTech Era? Evidence from China’s Peer-to-Peer Lending. Journal of Theoretical and Applied Electronic Commerce Research, 16(1), 52-70. https://doi.org/10.4067/S0718-18762021000100105

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