Impacts of Venture Capital on Online P2P Lending Platforms: Empirical Evidence from China

ABSTRACT

We examined the impacts of venture capital investment (VCI) on the performance of online Peer-to-Peer (P2P) lending platforms. The research results show that: (1) Gaining the first round of VCI can increase the transaction scale and improve the compliance with regulatory requirement of the online P2P lending platforms; and (2) the platforms acquiring more rounds of VCI have greater turnover. The above research shows that under the background of information asymmetry, the certification function and monitoring mechanism of VCs can work in online P2P lending markets.

KEY WORDS:

• compliance with regulatory requirement
• P2P lending platforms
• transaction scale
• venture capital

Additional information

Funding

This work is supported by National Natural Science Foundation of China (Nos. 71403215, 71503199, 71873103, 71873011), the Key Projects of National Natural Science Foundation of China (No. 71731003), MOE (Ministry of Education in China) Project of Humanities and Social Science (Nos. 13YJC790177, 2452017200), the Fundamental Research Funds for the Central Universities (No. 2017RWYB07), the Social Science Foundation of Shaanxi Province (No. 2018D51), the Sixth Industrial Research Institute Project of Northwest A&F University (No. Z220121607).