ABSTRACT
As the COVID-19 pandemic adversely affects the financial markets, a better understanding of the lending dynamics of a successful marketplace is necessary under the conditions of financial distress. Using the loan book database of Mintos (Latvia) and employing logit regression method, we provide evidence of the pandemic-induced exposure to default risk in the marketplace lending market. Our analysis indicates that the probability of default increases from 0.056 in the pre-pandemic period to 0.079 in the post-pandemic period. COVID-19 pandemic has a significant impact on default risk during May and June of 2020. We also find that the magnitude of the impact of COVID-19 risk is higher for borrowers with lower credit ratings and in countries with low levels of FinTech adoption. Our main findings are robust to sample selection bias allowing for a better understanding of and quantifying risks related to FinTech loans during the pandemic and periods of overall economic distress.
ABSTRACT
Abstract We examine the impact of COVID-19 on changes in firm value, and the moderating role of firm-level sustainability performance on this relationship. We find that firms domiciled in countries where the COVID-19 impact is more devastating experienced greater decline in firm value. The negative impact of COVID-19 on firm value is less pronounced for firms with better sustainability performance. Firms domiciled in countries with higher levels of environmental- and stakeholder-value-oriented culture experienced less decline in firm value from the impact of COVID-19. Findings suggest a firm?s stakeholder-value orientation contributes to preserving a firm?s value when general stakeholder value declines.