The impact of FinTech development on stock price crash risk and the role of corporate social responsibility: Evidence from Vietnam

Abstract

AbstractWith the strong development of Financial Technology (FinTech) innovation in recent years, academic interest in the effect of FinTech on financial market has also increased significantly. To develop the field further, this study investigates the effect of FinTech development on future stock price crash risk and the role of corporate social responsibility in an emerging financial market. By using a sample of 662 listed firms in the Vietnamese stock exchange for the period 2011–2020 and applying the fixed‐effect and System GMM estimation method, we find that FinTech development results in increased stock price crash risk. However, corporate social responsibility disclosure can mitigate such effect. As an extension, we also provide evidence that the effect of FinTech development on crash risk is stronger and the role of corporate social responsibility disclosure becomes more important in small firms. Our findings provide several important implications for shareholders, investors, and regulators in the fields of management and investment.