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Paper Number
2662
Paper Type
short
Description
The extant literature has shown that offline group proximity manifests in online peer-to-peer lending platforms, inhibiting online transactions in those markets. The findings of this research suggest that digital distance, as measured by the rate of Facebook friendship between country pairs, can also influence lending actions in bi-country lending. Building on a dataset from Kiva.org, we show that digital distance significantly and negatively affects bi-country lending actions, on top of other distance-related barriers discussed in the literature. The results also shed light on the role of government policies regarding local IT infrastructure and Internet freedom, revealing that greater levels of IT infrastructure and Internet freedom can compensate for the negative effect of digital distance on prosocial lending.
Recommended Citation
Sabzehzar, Amin; Zhou, Yingxin; and HOU, JINGBO, "Can Social Disconnectedness Inhibit Online Trade? Examining the Effects of Digital Distance on Peer-to-peer Lending" (2023). ICIS 2023 Proceedings. 9.
https://aisel.aisnet.org/icis2023/generalis/generalis/9
Can Social Disconnectedness Inhibit Online Trade? Examining the Effects of Digital Distance on Peer-to-peer Lending
The extant literature has shown that offline group proximity manifests in online peer-to-peer lending platforms, inhibiting online transactions in those markets. The findings of this research suggest that digital distance, as measured by the rate of Facebook friendship between country pairs, can also influence lending actions in bi-country lending. Building on a dataset from Kiva.org, we show that digital distance significantly and negatively affects bi-country lending actions, on top of other distance-related barriers discussed in the literature. The results also shed light on the role of government policies regarding local IT infrastructure and Internet freedom, revealing that greater levels of IT infrastructure and Internet freedom can compensate for the negative effect of digital distance on prosocial lending.
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