Evaluating the Reputation of Internet Financial Platforms in China: A Sustainable Operations Perspective

Abstract

In China, many Internet financial platforms (IFPs) are grappling with sustainability challenges due to elevated default rates, which have triggered widespread investor anxiety. To evaluate the sustainability practices of these platforms, we propose a reputation evaluation model designed to rank IFPs based on their sustainability. The economic sustainability of an IFP is decomposed into three components: scale strength, capital liquidity, and sustainable operating capability. Through an analysis of the correlation relationships between various indicators, we have identified nine significant indicators. Mathematical models are established to quantify these nine indicator variables. Subsequently, the score values of each indicator are integrated to establish a reputation evaluation model utilizing the weighted geometric mean method. Furthermore, the reputation evaluation values for 18 Chinese IFPs were calculated using the developed model, and the sustainability of the platforms was ranked according to the reputation evaluation value. A comparative analysis was also conducted between the sustainable rankings proposed in this study and the development rankings of the “Home of Online Loans” (HOL). The results reveal that our model effectively considers both the current operational strength and the sustainable development capability of the platform. It successfully identifies platforms with poor sustainability, assisting investors in making more informed decisions. Simultaneously, this study identifies key indicators influencing the sustainability of IFPs, providing valuable insights for managers seeking to enhance the sustainable operational levels of their platforms. © 2024 by the authors.