Banks responding to the digital surge through Open Innovation: Stock market performance effects of M&As with fintech firms

Francesco Cappa, Francesca Collevecchio, Raffaele Oriani and Enzo Peruffo

Journal of Economics and Business, 2022, vol. 121, issue C, No S0148619522000352

Abstract: The rise of digitalization and advancements in information technology are changing the business environment in a radical manner. In the banking sector specifically, in response to these recent trends and embracing the Open Innovation (OI) framework, banks increasingly seek mergers and acquisitions (M&As) with fintech firms. Since it is unclear what is the impact of these M&A transactions, this research investigates their effect on an acquiring bank’s future profits. To this end, the study applies an event study methodology to measure the stock market reaction to the announcements of M&A operations. In addition to advancing scientific knowledge about the effects brought about by fintech M&As on a bank’s future profits, and more broadly shedding light on the boundary conditions that make OI practices beneficial for organizations, the findings of this study are also relevant for managers because they provide preliminary advice on which acquisitions are more beneficial for banks.

Keywords: Bank; Fintech; M&A; Future profits; Stock market performance; Stock market reaction; Open Innovation (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:121:y:2022:i:c:s0148619522000352

DOI: 10.1016/j.jeconbus.2022.106079

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