Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China

Christopher J. Malloy; Lauren H. Cohen; Anthony K. Woo

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Teaching Note | HBS Case Collection | May 2018

Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China

by Christopher J. Malloy, Lauren H. Cohen and Anthony K. Woo

Abstract

Teaching Note for HBS No. 218-043.

Language: English

Format: Print

12 pages

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Citation:

Malloy, Christopher J., Lauren H. Cohen, and Anthony K. Woo. "Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China." Harvard Business School Teaching Note 218-117, May 2018.

About the Authors

Christopher J. Malloy

Sylvan C. Coleman Professor of Financial Management (Leave of Absence)

Finance

Entrepreneurial Management

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Lauren H. Cohen

L.E. Simmons Professor of Business Administration

Finance

Entrepreneurial Management

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Case | HBS Case Collection | April 2020 (Revised June 2020)

Ping An: Pioneering the New Model of ‘Technology-driven Finance’

Feng Zhu, Anthony K. Woo and Nancy Hua Dai

In mid-December 2018, Peter Ma, Chairman and CEO of Ping An Insurance (Group) Company of China, Ltd. was considering whether the company should grow a fifth ecosystem of Smart City Services. Established in 1988, Ping An was one of the top 10 global financial institutions in terms of market capitalization with 342, 550 employees and nearly 1.4 million sales agents. Under Ma's leadership, Ping An was transforming from a traditional financial institution to a leading global technology-powered personal financial services group. In recent years it executed a strategy of "Finance+Ecosystem" by leveraging three frontier technologies-AI, blockchain, and cloud technology-to develop four ecosystems: Financial Services, Healthcare, Automobile Services and Real Estate Services. Smart City Services, with its business potential and social impact, had become an attractive new opportunity for Ping An to leverage its technology expertise and business experience while gaining new traffic for the other four ecosystems. Ma wondered: How important would this new ecosystem be strategically for the future of Ping An? If Ping An decided to go after this market, how should Ping An differentiate itself from competitors?

Keywords: business ecosystems; fintech; Finance; Technology; Business Model; Expansion; Competitive Strategy; Financial Services Industry; Technology Industry;

Citation:
Zhu, Feng, Anthony K. Woo, and Nancy Hua Dai. "Ping An: Pioneering the New Model of ‘Technology-driven Finance’." Harvard Business School Case 620-068, April 2020. (Revised June 2020.) View Details

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Article | Journal of Finance | June 2020

Lazy Prices

Lauren Cohen, Christopher J. Malloy, Quoc Nguyen, Lauren Cohen, Christopher J. Malloy and Quoc Nguyen

We explore the implications of a subtle "default" choice that firms make in their regular reporting practices, namely that firms typically repeat what they most recently reported. Using the complete history of regular quarterly and annual filings by U.S. corporations from 1995 to 2014, we show that when firms make an active change in their reporting practices, this conveys an important signal about the firm. Changes to the language and construction of financial reports have strong implications for firms' future returns: a portfolio that shorts "changers" and buys "non-changers" earns up to 188 basis points per month (over 22% per year) in abnormal returns in the future. These reporting changes are concentrated in the management discussion (MD&A) section. Changes in language referring to the executive (CEO and CFO) team, or regarding litigation, are especially informative for future returns.

Keywords: information; default behavior; inertia; firms; annual reports; disclosure; Information; Business or Company Management; Behavior; Corporate Disclosure; Financial Reporting; United States;

Citation:
Cohen, Lauren, Christopher J. Malloy, and Quoc Nguyen. "Lazy Prices." Journal of Finance 75, no. 3 (June 2020): 1371–1415. (Winner of the First Prize, Chicago Quantitative Alliance Academic Paper Competition, 2016. Winner of the Jack Treynor Prize for superior work in the field of investment management and financial markets, sponsored by the Q-Group,The Institute for Quantitative Research in Finance, 2016. Winner of the Hillcrest Behavioral Finance Prize, 2016.) View Details

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Article | Journal of Finance | June 2020

Lazy Prices

Lauren Cohen, Christopher J. Malloy, Quoc Nguyen, Lauren Cohen, Christopher J. Malloy and Quoc Nguyen

We explore the implications of a subtle "default" choice that firms make in their regular reporting practices, namely that firms typically repeat what they most recently reported. Using the complete history of regular quarterly and annual filings by U.S. corporations from 1995 to 2014, we show that when firms make an active change in their reporting practices, this conveys an important signal about the firm. Changes to the language and construction of financial reports have strong implications for firms' future returns: a portfolio that shorts "changers" and buys "non-changers" earns up to 188 basis points per month (over 22% per year) in abnormal returns in the future. These reporting changes are concentrated in the management discussion (MD&A) section. Changes in language referring to the executive (CEO and CFO) team, or regarding litigation, are especially informative for future returns.

Keywords: information; default behavior; inertia; firms; annual reports; disclosure; Information; Business or Company Management; Behavior; Corporate Disclosure; Financial Reporting; United States;

Citation:
Cohen, Lauren, Christopher J. Malloy, and Quoc Nguyen. "Lazy Prices." Journal of Finance 75, no. 3 (June 2020): 1371–1415. (Winner of the First Prize, Chicago Quantitative Alliance Academic Paper Competition, 2016. Winner of the Jack Treynor Prize for superior work in the field of investment management and financial markets, sponsored by the Q-Group,The Institute for Quantitative Research in Finance, 2016. Winner of the Hillcrest Behavioral Finance Prize, 2016.) View Details

Cite View Details SSRN SSRN Find at Harvard Find at Harvard Related

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Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China

Abstract

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