Local FinTech development and stock price crash risk

Xinyue Wang, Yuqiang Cao, Zhuoan Feng, Meiting Lu and Yaowen Shan

Finance Research Letters, 2023, vol. 53, issue C

Abstract: This study investigates the effect of financial technology (FinTech) development on stock price crash risk. We show that the development of FinTech can inhibit management from deliberately hiding bad news and alleviate information asymmetry, thereby reducing stock price crash risk. This effect is more pronounced among non-state-owned enterprises, firms with poor information environments and low-quality internal controls, and those in competitive industries and regions with high marketization. Overall, these findings suggest that FinTech development can mitigate the deliberate concealment of bad news by management and improve the timeliness of disclosure, leading to lower risks faced by investors.

Keywords: Local FinTech development; Stock price crash risk; China (search for similar items in EconPapers)
JEL-codes: G10 G30 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000181

DOI: 10.1016/j.frl.2023.103644

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