The risk management effect of bank fintech: Evidence from stock price crash risk

Zhuang Liu, Rongnan Li, Jinlan Zhou and Yue Liu

International Review of Financial Analysis, 2025, vol. 99, issue C

Abstract: This research explores the risk management effect of bank fintech, specifically its role in mitigating stock price crash risk, by using data from Chinese banks and companies between 2011 and 2022. While numerous studies have examined the economic implications of bank fintech, few have explored its impact on stock price crash risk. This study addresses this gap by introducing a novel quantitative method for assessing bank fintech and analyzing its effect on stock price crash risk. Our findings indicate that the adoption of bank fintech is associated with a decrease in the likelihood of stock price crash risk. Further analysis reveals that this reduction is achieved by alleviating financial constraints and avoiding the long-term use of short-term debt. The heterogeneity tests confirm that different types of bank fintech have heterogeneous effects on stock price crash risk. The results highlight that the impact is most pronounced for companies that receive less analyst coverage, have lower quality, and are privately-owned. To ensure the reliability of our findings, we address potential endogeneity concerns and conduct a series of robustness checks. This study offers valuable insights into the significance of bank fintech in managing stock price crash risk.

Keywords: Bank fintech; Stock price crash risk; Financing constraints; Debt maturity structure (search for similar items in EconPapers)
JEL-codes: G21 G30 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:99:y:2025:i:c:s1057521925000262

DOI: 10.1016/j.irfa.2025.103939

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