Banks, FinTech and stock returns

Federico Carlini, Belinda Laura Del Gaudio, Claudio Porzio and Daniele Previtali

Finance Research Letters, 2022, vol. 45, issue C

Abstract: This paper investigates the effect of banks' investment in FinTech firms (FTF) on stock returns. We hand-collect data on 581 investment rounds made by FTFs, within at least one European or North American bank acting as investor. Our results show that banks’ investment in fintech affect stock markets. The abnormal reaction is negative, larger for young and technology-oriented firms, and stronger in the case of multiple investments. Bank size, leverage and profitability do not moderate abnormal returns. Overall, our study suggests that bank equity investment in FTFs is an important determinant of abnormal stock returns.

Keywords: Bank; Fintech; Investment; Event study (search for similar items in EconPapers)
JEL-codes: G14 G21 G34 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002348

DOI: 10.1016/j.frl.2021.102252

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