Local FinTech development and stock price crash risk

Xinyue Wang, Yuqiang Cao*, Zhuoan Feng, Meiting Lu, Yaowen Shan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

18 Citations (Scopus)

Abstract

This study investigates the effect of financial technology (FinTech) development on stock price crash risk. We show that the development of FinTech can inhibit management from deliberately hiding bad news and alleviate information asymmetry, thereby reducing stock price crash risk. This effect is more pronounced among non-state-owned enterprises, firms with poor information environments and low-quality internal controls, and those in competitive industries and regions with high marketization. Overall, these findings suggest that FinTech development can mitigate the deliberate concealment of bad news by management and improve the timeliness of disclosure, leading to lower risks faced by investors.

Original languageEnglish
Article number103644
Pages (from-to)1-12
Number of pages12
JournalFinance Research Letters
Volume53
DOIs
Publication statusPublished - May 2023

Keywords

  • China
  • Local FinTech development
  • Stock price crash risk

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