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

Fumiko Takeda; Koichi Takeda; Toshihiko Takemura; Ryota Ueda

doi:10.1016/j.frl.2020.101811

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

Fumiko Takeda, Koichi Takeda, Toshihiko Takemura, Ryota Ueda

Research output: Contribution to journal › Article › peer-review

10 Citations (Scopus)

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.

Original language	English
Article number	101811
Journal	Finance Research Letters
Volume	41
DOIs	https://doi.org/10.1016/j.frl.2020.101811
Publication status	Published - 2021 Jul
Externally published	Yes

Keywords

Bank
Event study
FinTech
M&A
Stock price

ASJC Scopus subject areas

Finance

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10.1016/j.frl.2020.101811

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title = "The impact of information technology investment announcements on the market value of the Japanese regional banks",

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{\textquoteright} 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{\textquoteright} size and with the individual shareholders{\textquoteright} ratio. Third, regional banks{\textquoteright} stock prices respond more negatively when there's news regarding equity investments to FinTech companies.",

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AU - Takeda, Fumiko

AU - Takeda, Koichi

AU - Takemura, Toshihiko

AU - Ueda, Ryota

PY - 2021/7

Y1 - 2021/7

N2 - 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.

AB - 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.

KW - Bank

KW - Event study

KW - FinTech

KW - M&A

KW - Stock price

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JO - Finance Research Letters

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M1 - 101811

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

Abstract

Keywords

ASJC Scopus subject areas

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