Financial leverage and performance: the case of financial technology firms
Financial leverage and performance: the case of financial technology firms
Over the past years, the financial technology industry has gained considerable attention from policy makers and regulators, market participants, as well as the general public. Despite the interest of these stakeholders, academic research on the topic is scarce and we aim to extend the literature by examining the impact of financial leverage on the performance of FinTech firms. Using a sample of 146 U.S. FinTech firms operating in ten market segments over the period 2000–2016, we find that financial leverage has a negative impact on profitability and risk-adjusted performance. We also reveal that the magnitude of the influence of leverage depends on firm age. The results are robust to the use of a cross-country sample, alternative model specifications and estimation approaches.
5103-5121
Papadimitri, Panagiota
b7edf14e-3b00-4317-a6ce-8741b593d5b0
Pasiouras, Fotios
48097419-7f9d-4bd4-93a0-6ae59bdf9a0e
Tasiou, Menelaos
e402686d-dbf2-48d5-aba8-da9b4ad3701f
27 April 2021
Papadimitri, Panagiota
b7edf14e-3b00-4317-a6ce-8741b593d5b0
Pasiouras, Fotios
48097419-7f9d-4bd4-93a0-6ae59bdf9a0e
Tasiou, Menelaos
e402686d-dbf2-48d5-aba8-da9b4ad3701f
Papadimitri, Panagiota, Pasiouras, Fotios and Tasiou, Menelaos
(2021)
Financial leverage and performance: the case of financial technology firms.
Applied Economics, .
(doi:10.1080/00036846.2021.1915949).
Abstract
Over the past years, the financial technology industry has gained considerable attention from policy makers and regulators, market participants, as well as the general public. Despite the interest of these stakeholders, academic research on the topic is scarce and we aim to extend the literature by examining the impact of financial leverage on the performance of FinTech firms. Using a sample of 146 U.S. FinTech firms operating in ten market segments over the period 2000–2016, we find that financial leverage has a negative impact on profitability and risk-adjusted performance. We also reveal that the magnitude of the influence of leverage depends on firm age. The results are robust to the use of a cross-country sample, alternative model specifications and estimation approaches.
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Accepted/In Press date: 27 April 2021
Published date: 27 April 2021
Identifiers
Local EPrints ID: 469686
URI: http://eprints.soton.ac.uk/id/eprint/469686
ISSN: 0003-6846
PURE UUID: d6142bbf-2c4c-4a28-bc1f-4309c078f548
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Date deposited: 22 Sep 2022 16:36
Last modified: 17 Mar 2024 04:13
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Author:
Panagiota Papadimitri
Author:
Fotios Pasiouras
Author:
Menelaos Tasiou
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