FinTech Credit and Entrepreneurial Growth - new publication by Harald Hau
Based on automated credit lines to about two million vendors trading on Alibaba’s online retail platform, and a discontinuity in the credit decision algorithm, Professor Harald Hau and his co-authors document that a vendor’s access to FinTech credit boosts its sales growth, transaction growth, and the level of customer satisfaction gauged by product, service, and consignment ratings.
These effects are more pronounced for vendors with (1) sparse credit information; (2) less collateral; (3) higher distribution costs; and (4) weaker debt contract enforceability in local regions, all of which reveal a FinTech advantage over traditional credit technology.
The paper is co-authored with Yi Huang, Chen Lin, Hongzhe Shan, Zixia Sheng, and Lai Wei, and is forthcoming in the Journal of Finance.
Prof. Hau is the Director of the GEMFIN (Executive Master in Finance) program.
Dec 28, 2023