Surviving the Fintech Disruption

64 Pages Posted: 3 May 2021 Last revised: 17 May 2021

See all articles by Wei Jiang

Wei Jiang

Columbia Business School - Finance and Economics; ECGI; NBER

Yuehua Tang

University of Florida - Department of Finance

Rachel Xiao

Georgia State University - Department of Finance

Vincent Yao

Georgia State University - J. Mack Robinson College of Business

Date Written: April 2021

Abstract

This paper studies how demand for labor reacts to financial technology (fintech) shocks based on comprehensive databases of fintech patents and firm job postings in the U.S. during the past decade. We first develop a measure of fintech exposure at the occupation level by intersecting the textual information in job task descriptions and fintech patents. We then document a significant decline of job postings in the most exposed occupations, and an increase in industry as well as geographical concentration of these occupations. Firms resort to an upskilling strategy in face of the fintech disruption, requiring “combo” (finance and software) skills, higher education attainments, and longer work experiences in the hiring of fintech-exposed jobs. Financial firms and those with high innovation outputs are able to offset the disruptive effect from the fintech shock. Among innovating firms, however, only inventors (but not acquisition-driven innovators) experience growth in hiring, sales, investment, and enjoy better returns on assets.

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Suggested Citation

Jiang, Wei and Tang, Yuehua and Xiao, Rachel and Yao, Vincent, Surviving the Fintech Disruption (April 2021). NBER Working Paper No. w28668, Available at SSRN: https://ssrn.com/abstract=3838469

Wei Jiang (Contact Author)

Columbia Business School - Finance and Economics ( email )

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Yuehua Tang

University of Florida - Department of Finance ( email )

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Rachel Xiao

Georgia State University - Department of Finance ( email )

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Atlanta, GA 30303-3083
United States

Vincent Yao

Georgia State University - J. Mack Robinson College of Business ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

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