Corporate reputation and market reaction: evidence from FinTech industry

ABSTRACT

In this paper, we examine the impact of corporate reputation on FinTech firms. Using a unique hand-collected dataset of customer complaints, violations, hacks/data breaches, and lawsuits; we find that markets negatively react to violation announcements, especially for lawsuits. Our findings show that despite their popularity, corporate wrongdoing is skyrocketing and can negatively impact FinTech firms. These findings have implications for FinTech management, stakeholders, and investors.

KEYWORDS:

• FinTech
• reputation
• violations
• corporate governance

JEL CLASSIFICATION:

• K41
• G23
• M31

Disclosure statement

No potential conflict of interest was reported by the author(s).

Research involving human and animal rights

This article does not include any studies with human participants or animals performed by any of the authors.

Notes

¹ We use monthly returns to calculate std. deviation.

Additional information

Funding

This research did not receive any specific grants from funding agencies in the public, commercial, or not-for-profit sectors.