Financial Literacy and Gender Difference in Loan Performance

53 Pages Posted: 9 Oct 2017 Last revised: 28 Aug 2018

See all articles by Jia Chen

Jia Chen

Peking University

Jiajun Jiang

Fudan University - School of Economics

Yu-Jane Liu

Peking University - Guanghua School of Management

Date Written: July 31, 2018

Abstract

We use data from a major peer-to-peer lending marketplace in China to study whether female and male investors evaluate loan performance differently. Controlling for variables of investor demographics, investor experience, and loan characteristics, we find that loans invested by female investors are more likely to default and have lower loan return in the future than loans invested by male investors. We define abnormal default or abnormal loan return as the part of the loan default or the part of loan return that is not explained by loan characteristics and find that the loans invested by female investors have higher abnormal default and lower abnormal loan return than the loans invested by male investors. Furthermore, female investors perform similarly to male investors in abnormal default or abnormal loan return when investors have high levels of education or income or when investors work in finance or information technology industries.

Keywords: Financial literacy, Loan default, Loan return, Gender difference, Peer-to-peer lending

JEL Classification: G11, G21, G40, J16, D90

Suggested Citation

Chen, Jia and Jiang, Jiajun and Liu, Yu-Jane, Financial Literacy and Gender Difference in Loan Performance (July 31, 2018). Journal of Empirical Finance, 2018, Vol. 48, p. 307-320, Available at SSRN: https://ssrn.com/abstract=3048880 or http://dx.doi.org/10.2139/ssrn.3048880

Jia Chen

Peking University ( email )

5 Yiheyuan Road
Haidian District
Beijing, Beijing 100871
China

Jiajun Jiang

Fudan University - School of Economics ( email )

600 GuoQuan Road
Shanghai, 200433
China

Yu-Jane Liu (Contact Author)

Peking University - Guanghua School of Management ( email )

Beijing
China

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