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Banks, FinTech and stock returns

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

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.

Suggested Citation

  • Carlini, Federico & Del Gaudio, Belinda Laura & Porzio, Claudio & Previtali, Daniele, 2022. "Banks, FinTech and stock returns," Finance Research Letters, Elsevier, vol. 45(C).
    • Handle: RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002348
    DOI: 10.1016/j.frl.2021.102252
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    Cited by:

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    More about this item

    Keywords

    Bank; Fintech; Investment; Event study;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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