Electronic Commerce Research

, Volume 19, Issue 1, pp 131–158 | Cite as

Factors affecting platform default risk in online peer-to-peer (P2P) lending business: an empirical study using Chinese online P2P platform data

  • Yeujun Yoon
  • Yu Li
  • Yan FengEmail author


Most previous literatures focus on the micro level default risk of individual borrowers whereas the platform default risk has not been rigorously studied yet. In this paper, we investigate the factors affecting platform default risk by employing the Chinese online P2P platform data. We find significant evidence that severe competition among platforms can increase risky behaviors of platforms by allowing riskier borrowers into the system. Some of the risk management devices could alleviate the default risk of platforms; however, others are not effective at alleviating the default risks. In addition, we find evidence that macro environment such as stock market condition or increases in speculative investment opportunities plays critical roles to increase the platform default rate. Our study sheds light on the platforms’ default risk issues and verifies key factors that influence their risky behaviors.


Online P2P (peer-to-peer) lending Online P2P platform default risk Electronic commerce 


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Authors and Affiliations

  1. 1.School of ManagementKyung Hee UniversitySeoulKorea
  2. 2.Peking University HSBC Business SchoolShenzhenChina

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