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RAAS 2025/06
Vol.15 No.1:
41-86
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Do Capital Market Investors Value FinTech? Evidence from U.S. Seasoned Equity Offerings
Ruei-Siang Chen1, Fang Gong2, and Yu-Fang Chu2*
1Department of Accountancy and Graduate Institute of Finance, National Cheng Kung University
2Department of Accounting, National Taiwan University
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Abstract:
This paper examines whether investors value financial technology (FinTech) development when reacting to seasoned equity offerings (SEOs). Using 986 observations of U.S. SEOs from 2019 to 2022, we find that firms with better FinTech experience more positive reactions than others. This positive effect is especially pronounced for firms with higher levels of information asymmetry, highlighting FinTech’s role in reducing information asymmetry. An extended event window analysis further shows that FinTech adoption continues to generate positive investor sentiment beyond the SEO announcement period. Beyond short-term market reactions, FinTech also contributes to long-term firm performance. Moreover, firms with better Fintech demonstrate greater investment efficiency by reducing underinvestment. Our findings remain robust after testing alternative FinTech proxies, accounting for the COVID-19 period, excluding technology-intensive firms, and considering the potential self-selection bias. Overall, our findings indicate that investors highly value FinTech for its ability to reduce information asymmetry and improve investment efficiency and firm performance.
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Keywords: Financial technology (FinTech); Seasoned equity offerings (SEO); Market reaction; Investment efficiency; Firm performance
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Corresponding author
; e-mail: yufangchu@ntu.edu.tw
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©
2025
Review of Accounting and Auditing Studies, ISSN 2221-9374
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