Research On The Determination Mechanism And Influencing Factors Of Interest Rate In Internet Lending Market Under Asymmetric Information

Under the promotion of modern information technology,digitization is the general trend.The emergence of Internet lending mode provides a new financing channel choice for long tail customers,such as small and micro enterprises,who have long been subject to financing constraints.However,the development of Internet lending industry has encountered difficulties and is now at the crossroads of development.Some Internet lending platforms are actively seeking transformation and upgrading,and the Internet lending mode is speeding up the iteration.The landmark event is that in 2020,China Banking and Insurance Regulatory Commission and the People's Bank of China openly solicited opinions on the "Interim Measures for the Administration of Network Small Loan Business(Draft)".As the United Nations described in the Digital Economy Report 2019,"the digital economy is still in the early stage of development,and we are faced with more problems than answers".At the critical moment of the development of the Internet lending industry,it is of great theoretical significance and practical urgency to re-examine the past development practice,and especially to discuss the key problems leading to difficulties,for understanding the early development law of financial technology,and thinking about the transformation and future development of Internet lending industry."High interest rate" and unreasonable interest rate pricing mechanism are one of the important reasons that hinder the development of Internet lending industry.For any financial market including the Internet lending market,the pricing mechanism is always at the core of the system.Whether the interest rate determination mechanism is reasonable or not is related to a series of important issues,such as whether the risk can be reasonably compensated,whether the credit resources can be reasonably allocated,whether the capital circulation is smooth or not,and so on.Therefore,it is one of the primary contents and basic issues of Internet lending market research.The existing literature at home and abroad has made a lot of useful attempts in revealing the influencing factors and mechanism of interest rate in the Internet lending market,and formed many research results.However,they mainly studied the influence of one or some factors on interest rate from different perspectives,and has not yet formed some more comprehensive analyses,and the research mainly focused on the influence of investor behavior and information provided by borrowers on interest rate.However,there is a lack of research on the production and business factors of borrowers and the external factors of Internet lending market.To answer these questions is conducive to the formation of a relatively comprehensive and systematic study on the determination of interest rate in the Internet lending market,which has strong theoretical and practical significance.Therefore,on the basis of existing research at home and abroad,this paper takes the interest rate determination in Internet lending market as the main research object,and is committed to exploring the problem of "the determination mechanism and influencing factors of interest rate in Internet lending market under asymmetric information".According to the principle of from concrete(summarizing the influencing factors of interest rate)?abstract(building a theoretical model)? concrete(analyzing the mechanism and effect of the main influencing factors on interest rate),this paper makes a systematic theoretical and empirical study from various aspects and levels.There are eight chapters in this paper.Besides the Chapterl,Chapter2 and Chapter3 chapters are the premise and foundation of this paper.Through the analysis of the second and third chapters,this paper summarizes the main factors that affect the interest rate in Internet lending market from the theoretical and practical aspects.Chapter4 constructs the mathematical model of interest rate determination in Internet lending market,and discusses the influence of the heterogeneity of borrowers' business on the equilibrium interest rate determination based on the model.From Chapter5 to Chapter7 this paper respectively analyze the mechanism of lending term,stock price fluctuation and monetary policy influencing the interest rate in Internet lending market,and make empirical tests.Chapter8 is the conclusion and suggestion.The main research contents and conclusions are as follows:1.This paper constructs the interest rate determination model in Internet lending market,and discusses the interest rate determination mechanism based on the model(Chapter 4).There are many factors that affect the interest rate in Internet lending market.In order to analyze them in a relatively comprehensive framework,this paper constructs an interest rate determination model in Internet lending market,and discusses the influence of main factors on interest rate based on the model.Among all the influencing factors,the operating factor of the borrower is crucial to the equilibrium interest rate,because it is an important source and guarantee of interest.But limited by the data,in the fourth chapter,this paper discusses the influence of "borrower's business heterogeneity",an important micro factor from the borrower,on the interest rate by mathematical deduction.The result shows that the increasing of borrower's business risk will lead to the rise of the interest rate.Based on the model,this chapter also discusses the influence of other three important factors,such as loan term,price fluctuations in the stock market and monetary policy,on the interest rate of Internet lending market.The results show that they can all influence the interest rate.2.This paper studies the impact of lending term on Internet lending interest rate,that is,the term structure of interest rate(Chapter 5).Term is a variable directly from the Internet loan contract,which is not easy to be ignored as an important micro factor affecting the interest rate.Based on the liquidity preference theory and the term mismatch theory,this paper analyzes the mechanism of the effect of lending term on interest rate,and holds that the term structure curve of interest rate in Internet lending market is ?-shaped.The empirical study confirmed this hypothesis,and according to the calculation,the inflection point of the impact appears in 47.67 months.The results of heterogeneity analysis show that compared with consumer loans,loans foe small-scale enterprises,loans for manufacturing enterprises and loans for low social capital borrowers,the "peak" characteristics of interest rate term structure curve of operating loans,loans for large-scale enterprises,loans for service enterprises and loans for high social capital borrowers are more obvious.3.This paper studies the impact of price fluctuation in the stock market on the interest rate in Internet lending market(Chapter 6).The analysis based on the micro data of CHFS shows that the stock market,banks and other formal credit markets are the two main external factors that may have a greater impact on the Internet lending market.Therefore,this paper discusses the impact of these two important external factors on the interest rate in Internet lending market.The research on the impact of price fluctuation in the stock market on interest rate shows that stock price fluctuation has a positive spillover effect on Internet lending market interest rate,but the spillover effect of stock price rising and falling on interest rate is asymmetric,and the spillover effect of stock price falling is more obvious.The empirical study finds that there is a significant positive interaction between borrowers' cognition and stock price in the process of impact,which indicates that in the process of stock price fluctuation disturbing the interest rate in Internet lending market,borrowers with higher cognitive level do not play a certain role in restraining the fluctuation of interest rate,but play a role in boosting the fire.4.This paper studies the impact of monetary policy on the interest rate in Internet lending market(Chapter 7).The mechanism analysis based on the theory of monetary policy transmission shows that monetary policy can influence the interest rate in Internet lending market at least through five mechanisms:opportunity cost,capital substitution,arbitrage in cross-market,risk-taking,and central bank information communication;formal credit system such as bank plays an important intermediary role.The empirical results show that the impact of monetary policy on the interest rate in Internet lending market is "Pro cyclical",which reflects the stance of monetary policy;the differentiated monetary and credit policies implemented to support the development of small and micro enterprises make the interest rate in Internet lending market decline.In short,in a relatively comprehensive analysis framework,this paper discusses the interest rate determination mechanism of the Internet lending market,and analyzes the path and effect of the important influencing factors on the interest rate from both theoretical and empirical aspects.This study can provide useful reference for the Internet lending industry in transition from the perspective of interest rate determination,which has strong theoretical and practical significance.