How the Economic Policy Uncertainty (EPU) impacts FinTech: The implication of P2P lending markets
Document Type
Article
Publication Date
12-1-2024
Abstract
This study investigates the impact of state-level Economic Policy Uncertainty (EPU) on FinTech lending marketplace. Leveraging two large-scale Peer-to-Peer (P2P) datasets of LendingClub and Prosper from 2010 to 2019 alongside the news-based EPU index, we unveil a causal relationship between the EPU and both the interest rates and loan amounts. Economically, a one-standard-deviation increase in EPU causes 4.49 and 8.90 basis points change in P2P loan rates, and 1.56% and 1.28% variation in loan amounts, for LendingClub and Prosper, respectively. Furthermore, the national-sourced EPU has a relatively stronger effect on LendingClub, while the state-sourced EPU imposes more impacts on Prosper.
Identifier
85207024205 (Scopus)
Publication Title
Finance Research Letters
External Full Text Location
https://doi.org/10.1016/j.frl.2024.106268
ISSN
15446123
Volume
70
Grant
AM21TMATRD00C003
Fund Ref
U.S. Department of Agriculture
Recommended Citation
Zhou, Fuqin; Chang, Aichih (Jasmine); and Shi, Jim, "How the Economic Policy Uncertainty (EPU) impacts FinTech: The implication of P2P lending markets" (2024). Faculty Publications. 40.
https://digitalcommons.njit.edu/fac_pubs/40
