IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v59y2024ics1544612323011510.html
   My bibliography  Save this article

Fusing futures: Financial institutions’ stock price response to fintech acquisitions

Author

Listed:
  • Kueschnig, Michael
  • Schertler, Andrea

Abstract

Traditional financial institutions are increasingly engaging in mergers and acquisitions (’M&As’) with financial technology (’fintech’) firms. Utilizing signaling theory, we argue that investors perceive an acquirer’s first fintech deal as a signal of commitment to a digitalized future. Our findings, based on 1681 fintech and nonfintech M&A deals, reveal that acquirers exhibit a significantly higher abnormal return for fintech deals than for nonfintech deals. This difference stems primarily from an acquirer’s first fintech deal. We rule out several alternative explanations, such as CEOs’ communication efforts to promote these deals. Consequently, a signaling effect seems likely.

Suggested Citation

  • Kueschnig, Michael & Schertler, Andrea, 2024. "Fusing futures: Financial institutions’ stock price response to fintech acquisitions," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011510
    DOI: 10.1016/j.frl.2023.104779
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323011510
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104779?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Fintech; Event study; Stock price response; First deal;
    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011510. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.