Study On The Impact Of Social Capital On Online P2P Lending Platforms’ Going-concern Crisis

Domestic online P2 P lending has experienced rapid growth since 2007, while problem platforms have arisen frequently at the same time. However, there is little study to explore the factors explaining P2 P platforms’ going-concern crisis. This paper explores the effect of social capital in P2 P lending platforms’ going-concern crisis. Based on the theory of social capital, we divide P2 P lending platforms’ social capital into vertical and horizontal social capital. Considering previous studies on goingconcern crisis and the characteristics of P2 P platforms, we build a theoretical model to describe how vertical social capital, horizontal social capital, physical capital, human capital and interest rates affect going-concern crisis, and propose corresponding hypothesis. By using parameter hypothesis testing, Logistic regression to empirically test the hypothesis, we find that:(1) there are significant differences between platforms of going-concern crisis and the platforms of going-concern in vertical social capital, horizontal social capital, physical capital, human capital, and the average interest rate;(2) horizontal social capital of P2 P platform has a significant negative impact on their going-concern crisis,while vertical social capital of P2 P platform appears no significant effect on their going-concern crisis;(3) physical capital have a significant negative impact on their going-concern crisis, higher average interest rate is associated with higher going-concern crisis possibility;(4)it’s uncertain whether human capital has an impact on platforms’ going-concern crisis. Our results indicate that establish and invest to horizontal social capital will benefit the sustained operating of online P2 P lending platforms. In addition, strong physical capital and lower average yields also are conducive to platforms’ continuing operation. The main innovation of this paper are considering the impact of social capital on enterprises’ going-concern crisis and confirming the social capital can sustain their businesses.