Research on Exit Behaviors of Online Lending Platforms based on Real Options

China Business and Market - - NEWS -

Li Xian-Ling,Kang Hai-yuan and WANG Yan (South Central University for Nationalities,Wuhan430074,China)

Abstract:Although the industry of online lending has developed rapidly in recent years,it is so prominent that so many platforms in this industry have been running and closing down. With regards to this,the author constructs a real option model to analyze the exit behaviors and influencing factors of online lending platforms in the first place. Then,it makes the empirical analysis of the platforms’operating data in the online lending industry. The study finds that:(1) the increasing of the demand volatility or operating cost in the platform may increase the possibility of the platform executing the exit option;and (2) the increases of the service demand drift rate and the exit cost may reduce the possibility that the platforms execute the exit option. To prevent the bankruptcy of online lending platforms,the platforms should strengthen its own management and risk control to reduce operating costs,enhance product innovation capabilities,and maintain high business growth rate;the government should improve the external supervision and management of the platform exit behaviors by refining the rules for exit management of online lending platforms.

Key words:platforms of online lending;real option;operational risk;operational cost;exit cost

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