Predicting Re-loan Success based on Friendship Network Characteristics in the Online Micro-loan Marketplace

Gao, Hongming and Ou, Carol X.J. and Liu, Hongwei and Pavlou, Paul A. and Zhu, Hui and Zhan, Mingjun (2018) Predicting Re-loan Success based on Friendship Network Characteristics in the Online Micro-loan Marketplace. AMERICAS CONFERENCE ON INFORMATION SYSTEMS (AMCIS).

[img]
Preview
Text
Predicting Re-loan Success based on Friendship Network Characteri.pdf

Download (335kB) | Preview

Abstract

Online micro-loan marketplaces cannot accurately and effectively approve loan applications due to the uncertain opportunistic behavior of loan applicants and the possibility of loan defaults by loan applicants. To address this challenge, in this study we integrate signaling theory, the social structure of competition, and the concept of homophily to develop a research model to predict a loan applicant’s re-loaning success by examining his/her financial status, friendship network characteristics, and friendship network centrality. Data of 683 anonymous and distinct loan applicants at a major online micro-loan marketplace in China largely support our hypotheses, highlighting the three key signals of a successful re-loan approval, a loan applicant’s credit card default, the number and the percentage of his/her friends with re-loan approvals in the focal micro-loan marketplace. Research and practical implications are discussed.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
T Technology > T Technology (General)
Divisions: Faculty of Industrial Engineering and Informatics > Information System
Depositing User: staff repository 1
Date Deposited: 14 Sep 2018 17:11
Last Modified: 14 Sep 2018 17:11
URI: http://repository.ittelkom-pwt.ac.id/id/eprint/5070

Actions (login required)

View Item View Item