Peng, H., Ji, J. orcid.org/0000-0001-9533-0325, Sun, H. orcid.org/0000-0001-5093-2197 et al. (1 more author) (2023) Legal enforcement and fintech credit: International evidence. Journal of Empirical Finance, 72. pp. 214-231. ISSN 0927-5398
Abstract
Previous studies have shown that the quality of legal institutions is negatively associated with the interest rates of business loans. Fintech lending, with improved ex ante risk-sharing practices that change the approach to credit provision, presents a challenge to the traditional relationship between law and finance. Compiling and studying over five million fintech loans from 24 countries, we show that, in comparison to traditional bank loans, the quality of legal enforcement matters less to the cost of fintech credit. Nonetheless, the impact of legal protection on the interest rates of fintech credit is more persistent when (1) the loans bear higher risk, (2) the fintech platforms have fewer risk-sharing tools, and (3) borrowers’ jurisdictions have fewer information-sharing channels. Our study contributes to the debate on the role of legal protection in the fintech credit market.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/). |
Keywords: | Legal enforcement; Fintech credit; Risk sharing; Information sharing |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 17 Mar 2023 11:57 |
Last Modified: | 31 Mar 2023 08:15 |
Status: | Published |
Publisher: | Elsevier BV |
Refereed: | Yes |
Identification Number: | 10.1016/j.jempfin.2023.03.007 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:197408 |