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- Publisher Website: 10.1080/07421222.2018.1440776
- Scopus: eid_2-s2.0-85044999482
- WOS: WOS:000428861300004
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Article: Cheap Talk? The Impact of Lender-Borrower Communication on P2P Lending Outcomes
Title | Cheap Talk? The Impact of Lender-Borrower Communication on P2P Lending Outcomes |
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Authors | |
Keywords | information quality lender-borrower communication online trust P2P lending peer-to-peer systems social influence |
Issue Date | 2018 |
Publisher | Taylor & Francis Inc. The Journal's web site is located at http://www.tandfonline.com/loi/mmis20 |
Citation | Journal of Management Information Systems, 2018, v. 35 n. 1, p. 53-85 How to Cite? |
Abstract | The limited information provided by peer-to-peer (P2P) lending platforms often is not sufficient for lenders to determine if a borrower is trustworthy and able to repay the loan. Using a unique dataset from a P2P lending platform, which allows lenders to seek information directly from borrowers and borrowers to respond to the questions and comments, we examine the impact of lender-borrower communication on funding outcomes and loan performance. Our results show that not only the amount but also the content of such direct communication matters. Specifically, the number of lender comments is negatively associated with funding success, while the number of borrower responses is positively associated with funding success, although only comments help reduce the final interest rate. The role of the communication is even stronger for listings with poor credit grades. Moreover, lenders are influenced by other lenders’ (positive or negative) comments and the quality of the information disclosed in borrower responses can affect funding outcomes. Loan performance (e.g., default ratio), however, cannot be predicted based on the amount of lender borrower communication. This research broadens and deepens our understanding of the roles of information disclosure, social influence, information quality, and trust in economic exchanges in online settings. |
Persistent Identifier | http://hdl.handle.net/10722/261239 |
ISSN | 2023 Impact Factor: 5.9 2023 SCImago Journal Rankings: 3.070 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Xu, JJ | - |
dc.contributor.author | Chau, MCL | - |
dc.date.accessioned | 2018-09-14T08:54:50Z | - |
dc.date.available | 2018-09-14T08:54:50Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Journal of Management Information Systems, 2018, v. 35 n. 1, p. 53-85 | - |
dc.identifier.issn | 0742-1222 | - |
dc.identifier.uri | http://hdl.handle.net/10722/261239 | - |
dc.description.abstract | The limited information provided by peer-to-peer (P2P) lending platforms often is not sufficient for lenders to determine if a borrower is trustworthy and able to repay the loan. Using a unique dataset from a P2P lending platform, which allows lenders to seek information directly from borrowers and borrowers to respond to the questions and comments, we examine the impact of lender-borrower communication on funding outcomes and loan performance. Our results show that not only the amount but also the content of such direct communication matters. Specifically, the number of lender comments is negatively associated with funding success, while the number of borrower responses is positively associated with funding success, although only comments help reduce the final interest rate. The role of the communication is even stronger for listings with poor credit grades. Moreover, lenders are influenced by other lenders’ (positive or negative) comments and the quality of the information disclosed in borrower responses can affect funding outcomes. Loan performance (e.g., default ratio), however, cannot be predicted based on the amount of lender borrower communication. This research broadens and deepens our understanding of the roles of information disclosure, social influence, information quality, and trust in economic exchanges in online settings. | - |
dc.language | eng | - |
dc.publisher | Taylor & Francis Inc. The Journal's web site is located at http://www.tandfonline.com/loi/mmis20 | - |
dc.relation.ispartof | Journal of Management Information Systems | - |
dc.rights | This is an electronic version of an article published in [include the complete citation information for the final version of the article as published in the print edition of the journal]. [JOURNAL TITLE] is available online at: http://www.informaworld.com/smpp/ with the open URL of your article. | - |
dc.subject | information quality | - |
dc.subject | lender-borrower communication | - |
dc.subject | online trust | - |
dc.subject | P2P lending | - |
dc.subject | peer-to-peer systems | - |
dc.subject | social influence | - |
dc.title | Cheap Talk? The Impact of Lender-Borrower Communication on P2P Lending Outcomes | - |
dc.type | Article | - |
dc.identifier.email | Chau, MCL: mchau@business.hku.hk | - |
dc.identifier.authority | Chau, MCL=rp01051 | - |
dc.identifier.doi | 10.1080/07421222.2018.1440776 | - |
dc.identifier.scopus | eid_2-s2.0-85044999482 | - |
dc.identifier.hkuros | 291326 | - |
dc.identifier.volume | 35 | - |
dc.identifier.issue | 1 | - |
dc.identifier.spage | 53 | - |
dc.identifier.epage | 85 | - |
dc.identifier.isi | WOS:000428861300004 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 0742-1222 | - |