Fin vs. Tech: How Does New Knowledge Creation and Lack of Trust in Financial Services Incumbents Influence the Emergence and Financing of Fintech Start-Ups?

Forthcoming in Small Business Economics

36 Pages Posted: 6 Nov 2019 Last revised: 2 Jun 2020

See all articles by Theodor Cojoianu

Theodor Cojoianu

Queen's University Belfast; University College Dublin (UCD) - Michael Smurfit Graduate School of Business; University of Oxford - Smith School of Enterprise and the Environment

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin; European Commission's Platform on Sustainable Finance; Stockholm School of Economics - Mistra Financial Systems (MFS)

Vladimir Pazitka

University of Oxford - School of Geography and Environment

Dariusz Wojcik

University of Oxford, St. Peter's College

Date Written: March 6, 2019

Abstract

In the aftermath of the global financial crisis, new financial technology (fintech) start-ups have emerged to challenge the long-established position of financial services incumbents. Drawing on resource-based theory and institutional theory, we investigate how the emergence of fintech start-ups and their financing is shaped by new regional knowledge creation and the lack of trust in financial institutions across 21 OECD countries, 226 regions and over the 2007 – 2014 period. While we find that knowledge generated in the IT sector is much more salient for fostering new fintech start-ups than knowledge generated in the financial services sector, we also find an increasing (decreasing) importance of new knowledge created in the financial services sector (IT sector) as fintech start-ups grow and seek financing. Our paper unveils that in the years where the level of trust in financial institutions falls within a region, there is an increase in the financing provided to fintech start-ups, however regions with historically low average levels of trust in financial institutions attract less fintech investment overall.

Keywords: fintech, financial technologies, entrepreneurship, knowledge spillovers, blockchain, cryptocurrencies, insurtech

JEL Classification: D83, L26, O31, P25, R51

Suggested Citation

Cojoianu, Theodor and Clark, Gordon L. and Hoepner, Andreas G. F. and Pazitka, Vladimir and Wojcik, Dariusz, Fin vs. Tech: How Does New Knowledge Creation and Lack of Trust in Financial Services Incumbents Influence the Emergence and Financing of Fintech Start-Ups? (March 6, 2019). Forthcoming in Small Business Economics, Available at SSRN: https://ssrn.com/abstract=3347755 or http://dx.doi.org/10.2139/ssrn.3347755

Theodor Cojoianu (Contact Author)

Queen's University Belfast ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

University College Dublin (UCD) - Michael Smurfit Graduate School of Business ( email )

Blackrock, Co. Dublin
Ireland

University of Oxford - Smith School of Enterprise and the Environment ( email )

United Kingdom

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin ( email )

Blackrock, Co. Dublin
Ireland

European Commission's Platform on Sustainable Finance ( email )

2 Rue de Spa
Brussels, 1000
Belgium

Stockholm School of Economics - Mistra Financial Systems (MFS) ( email )

MISUM
Box 6501, SE-113 83 Stockholm
Sweden

Vladimir Pazitka

University of Oxford - School of Geography and Environment ( email )

Oxford University Centre for the Environment
South Parks Road
Oxford, OX1 3QY
United Kingdom

Dariusz Wojcik

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
348
Abstract Views
1,518
rank
97,390
PlumX Metrics