The Role of FinTech on the Relationship Between Ownership Structure and Dividend Payments

Abstract

ABSTRACT This study aims to investigate the relationship between ownership structure and dividend payments (DP) and whether financial technology (FinTech) has an impact on this relationship. The study uses a panel sample of 278 Chinese financial firms during the period 2009–2022. The study applies regressions and finds that FinTech firms pay lower dividends, suggesting that these firms are holding onto the money to re‐invest for future growth. The results demonstrate that Institutional‐shareholding, and inside shareholding (Chairman‐shareholdings and Managerial‐shareholdings) increase DP in firms, while Largest‐ and Top_10 shareholdings decrease the DP. With the induction of FinTech, the Institutional‐shareholdings and inside shareholding decrease DP, so they utilise funds for future growth. Moreover, FinTech intensifies the negative impact of the Largest‐ and Top10‐shareholdings on DP. The results from the sub‐sample further support the findings. Several other economic parameters, such as the dynamic panel model, difference‐in‐differences and propensity score matching, and different dividend measures confirm the findings. The study contributes to other contentious findings found in the literature and offers helpful insights into the effects of innovation on prospective financial sector firms' ownership structure and DP, which seem to be impacted by FinTech.

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