Research Papers

With the rise of new financial technology (FinTech) solutions since the 2008 financial crisis, global peer-to-peer lending grew to a market capitalization of 34.16 billion dollars by the end of 2018, and is forecast to have a compound annual growth rate of 50.2% into the foreseeable future (TechSci). Peer-to-peer lending companies claim to be meeting the need for equal financial accessibility for all segments of the population. However, there is not yet definitive research on the effect of peer-to-peer lending on financial accessibility. This thesis sets out to uncover the ways in which Lending Club, the largest peer-to-peer lender in the United States, rejects or accepts loans based on geographic location. This study analyzes credit provision and loan outcomes in areas determined to be traditionally redlined, or areas predominated by traditionally redlined populations such as African Americans and Latinos.

This research seeks to understand how the probability of a Biden presidential victory impacted the abnormal returns of oil and gas companies during the 2020 election cycle. Additionally, abnormal returns are measured around important election dates in order to understand how investor expectations shifted during major turning-points in the election. This research finds that while election polling does not appear to have had a major effect on oil and gas companies, abnormal returns show significant changes surrounding important election dates. Moreover, it appears that investors rewarded oil and gas companies once the race was called, suggesting that investors may have felt that the potential for more competent COVID-19 policy outweighed the risks of climate related regulation.

This study uses an agent-based modeling approach to simulate different trading strategies in the equities market in order to test for the existence of random-walk pricing. Debates surrounding the efficiency and randomness of the stock market have long existed in economics and finance. The Efficient Market Hypothesis (EMH) and the random-walk hypothesis are examples of the robust debate surrounding whether it is possible to outperform the market for an extended period of time. This debate is important in understanding both the dynamics of equities markets, and the outcomes of different trading strategies. Results from this study support both random-walk price theory and the efficient market hypothesis, and suggest that consistent short-term profits cannot be achieved in the equity market.

In the aftermath of the 2008 financial crisis many banks reduced their participation in micro-lending, or the lending of small amounts of capital to businesses and institutions that otherwise would have difficulty getting a loan (Illing). There were many reasons for this trend, including government regulation, and the fact that credit risk had been shown to have far reaching implications over the entire economy. As a result, an entire industry was born, and has been growing rapidly --- operating alongside traditional banks but often with only a fraction of the regulation. For the purposes of this paper I will divide this ‘industry’ into three components: Peer to Peer lending, crowdfunding, and lending through point of sale companies. While this industry is difficult to describe accurately due to constant innovation and evolution, these categories cover the main bases for technologically driven, non-traditional funding models. The goal of this paper is to break down the economic risks and benefits that have been created by these financial technology companies in order to better understand their systemic implications.