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Academic SeminarFinancial Leverage of Borrowers: An Empirical Examination of Cryptocurrency and Online Peer-to-Peer Lending Markets

  • Date
  • 2019-07-19 ~ 2019-07-19
  • Time
  • 14:00 ~ 15:30
  • Place
  • 수펙스 경영관 101 강의실
  • Department
  • School of Management Engineering
  • Major
  • IT Management
We would like to invite you to participate in Management Engineering (ME) Seminar.

1. When: July 19th (Friday), 14:00~15:30
2. Where: Supex Building, Lecture Room 101
3. Speaker: Prof. Sunghun Chung (Santa Clara University)
4. Topic: Financial Leverage of Borrowers: An Empirical Examination of Cryptocurrency and Online Peer-to-Peer Lending Markets
5. Research field: IT Management
* Lecture will be delivered in Korean.
* Seminar materials: Abstract

We study the effect of cryptocurrency markets on borrowers in peer-to-peer (P2P) lending markets. By using the combined data from both markets during the period January 2017 to February 2019, we provide several novel findings. Our results indicate that the growth (decline) in cryptocurrency markets is associated with a large (small) amount of loan requests in the P2P market. This complementarity is strong for borrowers who have good credit grades and are likely to have further knowledge of and might use the borrowed money for investing in the cryptocurrency market. The growth in cryptocurrency markets is further associated with a low default rate, a low-interest rate, a high full-funded probability, and a short time required to meet the borrowing goal. The decline in cryptocurrency markets have the opposite tendency. These findings are also confirmed by our additional tests using exogenous natural shocks with propensity score matching. Overall, our study highlights the potential of the P2P lending market as a funding source for investment in the cryptocurrency market, especially for high-creditworthy and tech-savvy investors who likely have a low entering cost into the cryptocurrency market. Our study provides unique and important implications for theory and practice regarding the appropriate ways to manage crowdfunding platforms to build a new wave of “FinTech.”
Contact : Lee, Jisun ( jisunlee@kaist.ac.kr )