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Do financial technology firms influence bank performance?

Dinh Hoang Bach Phan, Paresh Kumar Narayan, R. Eki Rahman and Akhis R. Hutabarat

Pacific-Basin Finance Journal, 2020, vol. 62, issue C

Abstract: We develop a hypothesis that the growth of financial technology (FinTech) negatively influences bank performance. We study the Indonesia market, where FinTech growth has been impressive. Using a sample of 41 banks and data on FinTech firms, we show that the growth of FinTech firms negatively influences bank performance. We test our hypothesis through multiple additional tests and robustness tests, such as sensitivity to bank characteristics, effects of the Global Financial Crisis, and the use of alternative estimators. Our main conclusion that FinTech negatively predicts bank performance holds.

Keywords: Financial technology; Bank performance; Predictability; Estimator (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:62:y:2020:i:c:s0927538x18305638

DOI: 10.1016/j.pacfin.2019.101210

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