Does university reputation matter? Evidence from peer-to-peer lending

Using the sample of listings from one of the famous peer-to-peer lending platforms in China, Renrendai.com, we investigate the role of university reputation in peer-to-peer lending. The empirical results show that it is easier for borrowers who graduated from prestigious universities to obtain the requested loans and to have a higher fraction of listing funded. Borrowers who graduated from top ranking universities usually have a lower possibility of loan default and a lower ratio of loan default. Overall, our findings suggest that the university reputation matters in peer-to-peer lending as it can predict lenders’ and borrowers’ behaviors.