Topic: How Valuable is Fin Tech Innovation?
Speaker: Mark A. Chen, Georgia State University
Time: Friday, 17 November, 10:00-11:30
Place: Room 217, Guanghua Building 2
We provide some of the first large-scale evidence on the value of FinTech innovation to financial firms and industries. Using a unique dataset of patent filings covering 2003-2017, we apply textual analysis and machine-learning techniques to identify FinTech innovations and classify them into key technology categories. To measure the underlying value of an innovation, we use a new method that combines the stock price response to the innovation with observed patent filing counts. Our cross-sectional analysis shows that most types of FinTech innovation yield positive value to innovators, with blockchain technology being particularly valuable. For industries, blockchain and Internet of Things (IoT) are the most valuable technologies. Some innovation types are “disruptive” in that they bring negative value to certain financial industries. Disruptive FinTech innovations impact an industry more adversely when they originate from outside the financial sector, and they tend to impact industry followers but not industry leaders.
Dr. Chen obtained his Ph.D. from Harvard University. Prior to joining the Robinson College of Business, he was a member of the business school faculty at the University of Maryland, College Park. His research interests include corporate finance, corporate governance, and the behavior and performance of sell-side analysts. His work as appeared in academic journals such as the Journal of Finance, Journal of Business, Journal of Law and Economics, and Journal of Economic Theory.
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