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The impact of information technology investment announcements on the market value of the Japanese regional banks

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  • Takeda, Fumiko
  • Takeda, Koichi
  • Takemura, Toshihiko
  • Ueda, Ryota

Abstract

The business conditions surrounding Japanese regional banks have deteriorated for decades amid continuing ultra-low interest rates. We examine stock price reactions of regional banks to information technology (IT) investment announcements and analyze the factors that affect market responses. We provide three main findings. First, regional banks’ stock prices as a whole do not respond significantly to IT investment announcements. Second, stock price responses to IT investment announcements are more positively correlated with the regional banks’ size and with the individual shareholders’ ratio. Third, regional banks’ stock prices respond more negatively when there's news regarding equity investments to FinTech companies.

Suggested Citation

  • Takeda, Fumiko & Takeda, Koichi & Takemura, Toshihiko & Ueda, Ryota, 2021. "The impact of information technology investment announcements on the market value of the Japanese regional banks," Finance Research Letters, Elsevier, vol. 41(C).
    • Handle: RePEc:eee:finlet:v:41:y:2021:i:c:s1544612320316251
    DOI: 10.1016/j.frl.2020.101811
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    Cited by:

    1. Choudhary, Priya & Thenmozhi, M., 2024. "Fintech and financial sector: ADO analysis and future research agenda," International Review of Financial Analysis, Elsevier, vol. 93(C).
    2. Hodula, Martin, 2023. "Interest rates as a finance battleground? The rise of Fintech and big tech credit providers and bank interest margin," Finance Research Letters, Elsevier, vol. 53(C).
    3. Hodula, Martin, 2024. "Beyond innovation: Fintech credit and its ripple effects on traditional banking profitability," Finance Research Letters, Elsevier, vol. 63(C).

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    More about this item

    Keywords

    FinTech; Bank; M&A; Stock price; Event study;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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