Determinants of financial performance of FinTechs in Organisation for Economic Co-operation and Development countries

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Abstract

The study determined the effect of size, equity, labour, loans, and deposits on the performance of the financial technology (FinTechs; return on assets — ROA and return on equity — ROE). Data on FinTech performance was collected from the Refinitive Eikon platform. As prior studies have found, variables such as size, equity, labour, loans, and deposits can impact the ROA and ROE (Abbasi et al., 2021; Akbar, 2021). Drawing upon prior work examining similar relationships at the firm level one, the research analyzes a sample of 148 FinTech from 10 Organisation for Economic Co-operation and Development (OECD) countries from 2000–2022. Consistent with Abbasi et al.’s (2021) findings regarding FinTech adoption and efficiency, the impact of variables, including size, equity, loans, and deposits on returns, are evaluated. According to the study, it was clear that a rise in the company’s size led to a decline in its financial performance. The findings revealed that assets positively affected the performance of FinTechs across the different financial periods. Labour had a negative effect on the ROA across the OECD countries’ FinTechs, while loans positively affected the performance of the different FinTechs. From the study, there is a need for more collaborative research across academics, policymakers, and industry experts to better the outcomes.

Keywords: OECD, Performance, Equity, Loans, FinTechs, Returns

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: E44, G21, O33

Received: 02.11.2023
Accepted: 06.08.2024
Published online: 09.08.2024

How to cite this paper: AlBaker, Y. (2024). Determinants of financial performance of FinTechs in Organisation for Economic Co-operation and Development countries. Corporate & Business Strategy Review, 5(4), 8–19. https://doi.org/10.22495/cbsrv5i3siart1