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Macroeconomics and FinTech: Uncovering Latent Macroeconomic Effects on Peer-to-Peer Lending

Jessica Foo, Lek-Heng Lim, Ken Sze-Wai Wong

arXiv 31 Oct 2017 · Econometrics · 6 citations (OpenAlex)

arXiv:1710.11283 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Peer-to-peer (P2P) lending is a fast growing financial technology (FinTech) trend that is displacing traditional retail banking. Studies on P2P lending have focused on predicting individual interest rates or default probabilities. However, the relationship between aggregated P2P interest rates and the general economy will be of interest to investors and borrowers as the P2P credit market matures. We show that the variation in P2P interest rates across grade types are determined by three macroeconomic latent factors formed by Canonical Correlation Analysis (CCA) - macro default, investor uncertainty, and the fundamental value of the market. However, the variation in P2P interest rates across term types cannot be explained by the general economy.

Citation extraction

15
references
27
in-text mentions
15
distinct cited
0
self-citations
7,041
main-text words

appendix boundary found by appendix_titled_section at “Appendix” · 87% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1ahn APACrefauthors Ahn, S C. , Dieckmann, S. \ Perez, M F. APACrefau… (2012) 20121.00094100%
2dietrich APACrefauthors Dietrich, A. \ Wernli, R. APACrefauthors \ (2016) 20160.73732100%
3hair APACrefauthors Hair, J F. , Black, W C. , Babin, B J. , Anderso… (1998) 19980.64422100%
4litterman APACrefauthors Litterman, R B. \ Scheinkman, J. APACrefaut… (1991) 19910.64422100%
5ang APACrefauthors Ang, A. \ Piazzesi, M. APACrefauthors \ (2003) 20030.40511100%
6berg APACrefauthors Bergbrant, M C. \ Kelly, P J. APACrefauthors \ (2016) 20160.40511100%
7duffee APACrefauthors Duffee, G R. APACrefauthors \ (1998) 19980.40511100%
8fama APACrefauthors Fama, E F. \ French, K R. APACrefauthors \ (1993) 19930.40511100%
9gourieroux APACrefauthors Gourieroux, C. , Monfort, A. \ Renault, E.… (1993) 19930.40511100%
10herzenstein APACrefauthors Herzenstein, M. , Andrews, R L. , Dholaki… (2008) 20080.40511100%

Showing the top 10 of 15 scored citations.