Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023)

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The Impact of Political Orientation on Investment Risk Appetite: Evidence from a US P2P Platform

Authors
Baoxaing Xu1, *
1Hunan University of Finance and Economics, Changsha, China
*Corresponding author.
Corresponding Author
Baoxaing Xu
Available Online 30 November 2023.
DOI
10.2991/978-94-6463-298-9_61How to use a DOI?
Keywords
P2P platforms; Political preferences; Risk preferences
Abstract

This study utilizes the loan data from Prosper Company between 2005 and 2008, consisting of 575,011 records, to investigate the influence of political preferences on lenders' risk-taking behavior. The political leaning of each lender is measured by the percentage of Republican legislators in their respective state. The maximum interest rate accepted by a lender is used as a proxy for their risk preference. The results suggest that lenders who lean more towards the Republican party tend to have a higher risk appetite in the personal credit market, and this effect becomes even more pronounced with increased external competition. Further research reveals that during the period of Republican rule, lenders with a Republican-leaning political preference held a more optimistic expectation of the personal credit market, resulting in higher risk-taking behavior. These findings contribute to our understanding of the impact of political preferences on investment decisions and provide new insights and methodologies for related fields of research.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
30 November 2023
ISBN
10.2991/978-94-6463-298-9_61
ISSN
2352-5428
DOI
10.2991/978-94-6463-298-9_61How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Baoxaing Xu
PY  - 2023
DA  - 2023/11/30
TI  - The Impact of Political Orientation on Investment Risk Appetite: Evidence from a US P2P Platform
BT  - Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023)
PB  - Atlantis Press
SP  - 561
EP  - 567
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-298-9_61
DO  - 10.2991/978-94-6463-298-9_61
ID  - Xu2023
ER  -