Fintech and corporate governance: at times of financial crisis

Khakan Najaf (), Alice Chin (), Adrian Lean Wan Fook (), Mohamed M. Dhiaf () and Kaveh Asiaei
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Khakan Najaf: Monash University
Alice Chin: Pôle Paris Alternance (PPA) Business School
Adrian Lean Wan Fook: INTI International College Penang School of Business
Mohamed M. Dhiaf: Liwa College

Electronic Commerce Research, 2024, vol. 24, issue 1, No 21, 605-628

Abstract: Abstract The objective of this research is to probe the moderating role of Big Four auditors (a representative of corporate governance) on the market performance of firms during the pandemic period, with specific focus on Fintech and non-Fintech firms. Design/Methodology: Employing data from 48 Fintech and 140 non-Fintech firms spanning 2010 to 2021, the study utilizes ordinary least squares, quantile regression, and dynamic Generalised Moments Method (GMM) regression to assess the implications of engaging with a Big Four auditor on firms' market performance during the pandemic. The study reveals that Fintech firms, compared to their non-Fintech counterparts, displayed a significantly poorer market performance by 110.4% during the pandemic. Additionally, Fintech firms audited by a Big Four auditor experienced a decline in market performance by 101.9%, indicating a potential negative impact of Big Four auditors' engagement for Fintech firms in crisis periods. The outcomes of this research underscore the importance of corporate governance during financial crises, and its influence on shareholder perception, especially in the context of Fintech firms. As such, it provides meaningful insights for governments, policymakers, and various practitioners including firm shareholders and start-up entrepreneurs. This study introduces a novel examination of the moderating effect of Big Four auditors on firms' market performance during a pandemic, especially in the context of Fintech firms. By shedding light on the relationship between corporate governance and market performance during crises, it fills a significant gap in the existing literature.

Keywords: Big four; Governance; Fintech; Market performance; GMM; Quantile regression (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10660-023-09733-1

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