2021/04/12 by Iftekhar Hasan, Qing He, Haitian Lu · 101 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Psychology · #Affect (linguistics) #Business #Capital (architecture) #Ceteris paribus #Economics #FinTech, Crowdfunding, Digital Finance #Finance #Interpersonal ties #Islamic Finance and Banking Studies #Loan #Microeconomics #Microfinance and Financial Inclusion #Monetary economics #Political science #Propensity score matching #Psychology #Social capital #Social psychology #Social trust #Trustworthiness
paper · pdf · doi:10.1017/s0022109021000259
published in Journal of Financial and Quantitative Analysis 57(4), 1409-1453 (Cambridge University Press)
openalex publication_date 2021/04/12 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/26
Abstract How does social capital affect trust? Evidence from a Chinese peer-to-peer lending platform shows that regional social capital affects the trustee’s trustworthiness and the trustor’s trust propensity. Ceteris paribus, borrowers from regions with higher social capital receive larger bids from individual lenders and have higher funding success, larger loan sizes, and lower default rates, especially for low-quality borrowers. Lenders from regions with higher social capital take higher risks and have higher default rates, especially for inexperienced lenders. Cross-regional transactions are most (least) likely to be realized between parties from regions with high (low) social capital.