Do FinTech Acquisitions Improve the Operating Performance or Risk Profiles of Acquiring Firms?
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Authors
Austin, Rebekah
Issue Date
2021-04-21
Volume
Issue
Type
Dissertation
Language
en_US
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Alternative Title
Abstract
I examine whether an acquiring firm benefits in the acquisition of a FinTech firm in terms of improved firm performance or declines in firm risk. I employ three different methodologies to examine the relation between FinTech acquisitions and their impact on the acquiring firm performance and risk: the change model, the intercept methodology, and difference in differences methodology. Specifically, I compare a sample of FinTech acquirers to two different reference groups: non-FinTech acquirers and the FinTech acquirer’s industry peers. The performance results are sensitive to performance metric and benchmark, but there is mixed evidence that the performance of FinTech acquirers improves after the acquisition of a FinTech firm. All methodologies and benchmarks employed provide evidence that the FinTech acquirers experience declines in their risk profiles after the acquisition. Understanding the nuances of the impacts of FinTech acquisitions on acquiring firm’s performance and risk is important for managerial decision making, especially as financial services firms grapple with the disruptions to the traditional financial services business model caused by FinTech innovation.
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Publisher
Creighton University
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Copyright is retained by the Author. A non-exclusive distribution right is granted to Creighton University and to ProQuest following the publishing model selected above.