Title: Leverage, profitability, and risk information disclosure: review on global Fintech industry

Authors: Aulia M. Fitriani; M.H. Yahya

Addresses: School of Business and Economics, Universiti Putra Malaysia 43400, Serdang, Selangor, Malaysia ' Room A229, School of Business and Economics, Universiti Putra Malaysia 43400, Serdang, Selangor, Malaysia

Abstract: This study aims to examine the role of leverage and profitability on risk information disclosure in global financial technology (Fintech) companies. The fast-growing Fintech business is attracting not only investors but also academic interest. Aside from offering flexibility and promoting financial literacy, sustainability has become a major concern for Fintech. Conducting content analysis on 110 annual reports from 22 global Fintech companies 2014-2018 and a panel data analysis, the results show that only net sales, a proxy for profitability, has a significant and positive effect on risk information disclosure. Furthermore, leverage has no significant effect except for high-debt and big-asset Fintech companies. Additionally, business sectors of Fintech companies suggest a conditioning role in the relationship between company characteristics and risk information disclosure. This indicates the incentive to disclose risk information in global Fintech companies and provides insight for policymakers in deciding the best policy for the Fintech sector.

Keywords: profitability; risk information disclosure; RID; financial reporting; Fintech; Fintech profitability.

DOI: 10.1504/AJFA.2023.136694

American Journal of Finance and Accounting, 2023 Vol.7 No.3/4, pp.258 - 273

Received: 21 Jun 2023
Accepted: 26 Nov 2023
Published online: 16 Feb 2024 *

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