Will CEOs with banking experience lower default risks? Evidence from P2P lending platforms in China

Will CEOs with banking experience lower default risks? Evidence from P2P lending platforms in China

Using a novel dataset of 121 Chinese P2P lending platforms, we investigate the impact of CEOs' banking experience on default risk. The empirical results indicate that CEOs with prior banking experience manage default risk better. Moreover, CEOs' banking experience has a stronger influence...

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Bibliographic Details
Main Authors: GONG, Qiang, LIU, Chong, PENG, Qianni, WANG, Luying
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2020
Subjects:
CEOs' banking experience
Default risk
Peer-to-peer lending platform (P2P)
Asian Studies
E-Commerce
Finance and Financial Management
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/6701
https://ink.library.smu.edu.sg/context/lkcsb_research/article/7700/viewcontent/Will_CEOs_Banking_Exp_2020_av.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:Using a novel dataset of 121 Chinese P2P lending platforms, we investigate the impact of CEOs' banking experience on default risk. The empirical results indicate that CEOs with prior banking experience manage default risk better. Moreover, CEOs' banking experience has a stronger influence on small platforms and in situations where the platforms' depository banks are city commercial banks. Our results indicate that although fintech provides technology to reduce risks, we cannot ignore the constructive role of professional experience in risk management. Thus, investors and regulators in emerging markets should pay attention to managers' financial qualifications, and especially to CEOs' banking experience.

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