Borrower's default and self-disclosure of social media information in P2P lending

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

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Original languageEnglish
Article number30
Journal / PublicationFinancial Innovation
Issue number1
Online published17 Dec 2016
Publication statusPublished - Dec 2016



Background: We examine the signaling effect of borrowers' social media behavior, especially self-disclosure behavior, on the default probability of money borrowers on a peer-to-peer (P2P) lending site.
Method: We use a unique dataset that combines loan data from a large P2P lending site with the borrower’s social media presence data from a popular social media site.
Results: Through a natural experiment enabled by an instrument variable, we identify two forms of social media information that act as signals of borrowers’ creditworthiness: (1) borrowers’ choice to self-disclose their social media account to the P2P lending site, and (2) borrowers’ social media behavior, such as their social network scope and social media engagement.
Conclusion: This study offers new insights for screening borrowers in P2P lending and a novel usage of social media information.

Research Area(s)

  • P2P lending, Social media, Self-disclosure, Default, Difference-in-difference

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