(A) study on the association between the disclosure regarding fintech innovation by financial firms and market reactions금융 기업들의 핀테크 혁신에 관한 정보공시와 시장반응의 관계에 관한 연구
This study examines how the disclosure regarding FinTech innovation in the MD&A (Management Discussion and Analysis) section of 10-K filings by financial firms affects investors’ reactions to the firms’ earnings announcements. In particular, to what extent such innovative activities documented in the MD&A sections of 10-K filings drive stronger stock market response around the earnings announcement. The empirical results show that on average, the firms with more disclosure regarding FinTech innovation show higher earnings response coefficient (ERC), which can be explained by the higher earnings persistence for firms with more disclosure regarding FinTech innovation in the MD&A section of 10-K filings. I further distinguish the FinTech innovation into seven technology categories and the financial industry into five sectors, and examine which innovation technologies driver stronger ERCs in a certain financial industry sector. I find that major drivers of positive impact on firm’s future performance and value are innovations related to cybersecurity, (Mobile) transactions, data analytics, and robo-advising. When I divide the sample into two periods (before vs after 2015), I find that FinTech innovation in later period(2015 to 2019) show much more profound impact on earnings persistence and stronger ERCs than the earlier period (2010 to 2014). Finally, my results remain qualitatively similar when I use different methods for measuring the amount of disclosure regarding FinTech innovation.