COVID-19 and unethical decision-making in fintech-based loaning context : evidence from China = COVID-19和不道德决策 : 基于中国的证据

Abstract

Although epidemic control has been liberalized in China, the impact of the epidemic on China over the past three years has been multifaceted. A large number of studies have begun to examine the impact of the epidemic. However, most of the existing studies on COVID-19 have focused on the macro level and have paid insufficient attention to the impact of the outbreak on individuals. This study aims to join this conversation and broaden the literature in this stream by focusing on individual-level behavior. This article explores how the epidemic affects individual defaults. I argue that the outbreak disrupted the normal economic rhythm. The government’s strict control over the epidemic has had a serious negative impact on the real economy and has hindered business growth. All of these negative factors will eventually trickle down to the individual level, leaving individuals with less income and fewer resources available, and ultimately increasing the likelihood that people will default on their loans. However, the impact of the epidemic on default is not homogeneous. I also explore the heterogeneity of this impact at the individual level and at the regional level. I argue that compared to men, women have fewer resources and are less resilient to risk due to their natural vulnerability, and are therefore more likely to default. At the regional level, I examine the impact of regional economic development and regional culture. I argue that the higher the level of regional economic development, the more opportunities individuals have and the more resources they have, thus weakening the positive effect of epidemics on default. Regional culture, on the other hand, is relatively more complex. I argue that the Yellow River culture, the Southwest Mountain culture, and the Farming Nomadic Border culture enhance the impact of the epidemic on default due to the lack of contractual spirit. Conversely, the Yangtze River Basin culture, the Southeast coastal culture, and the internationalized culture mitigate the impact of the epidemic on default. Finally, the Snowy Plateau culture differs from the previous two cultural systems in that I believe that the Snowy Plateau weakens the impact of the epidemic on default due to the presence of religion. I use a unique dataset on the personal loaning of a fintech company to test the hypothesis. Most of the hypotheses were supported. The article consists of seven chapters. The first chapter is an introduction, which introduces the research background, research questions, research implications and roadmap. Chapter 2 is the literature review. The literature review section reviews studies related to unethical behavior, social status, COVID-19, gender, regional economy, and regional culture. Chapter 3 is the theory and hypothesis. Chapter 4 is the sample and data. Chapter 5 is the empirical results. Chapter 6 is the discussion. Chapter 7 is a brief summary of the study.