Do financial regulations have impacts on ownership structure of P2P firms?

ABSTRACT

We assess the impacts of ownership structures on China’s P2P lending platforms. We classify data into private and non-private groups, and we use the information such as turnovers and net inflows to capture firm performance. The findings suggest that investors prefer non-private to private P2P platforms before and after related financial regulations. Private platforms thus increase their interest rates to attract borrowers, which surges systematic risks. Such results are especially dominant for P2P platforms in non-BSGS cities, indicating the difficultly private platforms compete against financial regulations.

KEYWORDS:

• P2P finance
• ownership structure
• financial regulations
• firm performance

JEL CLASSIFICATION:

• G21
• G32
• G28

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ RMB 2 billion (around 140 million US dollars). Figure source: https://www.ppdai.com/.

² http://www.cbrc.gov.cn/govView_37D312933F1A4CECBC18F9A96293F450.html.

³ Most of these firms are SOEs.

⁴ Beijing, Shanghai, Guangzhou and Shenzhen.

Additional information

Funding

This work is supported by National Natural Science Foundation of China [No.71503165] and China Postdoctoral Science Foundation [No. 2016M601555].