Journal
SUSTAINABILITY
Volume 13, Issue 4, Pages -Publisher
MDPI
DOI: 10.3390/su13041819
Keywords
business friendliness; law enforcement; informal institutions; P2Ps; sustainable economic growth; emerging markets
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The study finds that business-friendly local-government policies combined with weak legal institutions lead to higher prevalence of fraud activities, as evidenced by the number of failed P2P lending platforms in China.
In this paper, we test the hypothesis that business-friendly local-government policies combined with weak legal institutions lead to lower economic welfare in the form of greater fraud activity. Using data of almost 3000 failed peer-to-peer (P2P) lending platforms in China, labeled as runaways, we find that they are more prevalent in provinces with business-friendly policies with weak law-enforcement regimes.
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