Factors influencing the fintech firm performance in east asia

Ling, Kwei En (2025) Factors influencing the fintech firm performance in east asia. Final Year Project, UTAR.

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Abstract

This study investigates the factors that influence business performance among East Asian FinTech enterprises, with an emphasis on the functions of liquidity, working capital management, and leverage, as well as the moderating effect of COVID-19. Using panel data from 200 FinTech firms in China, Japan, and South Korea from 2016 to 2019 and 2021 to 2024, the study employs Fixed Effects regression models with robust standard errors to account for unobserved firm-specific heterogeneity. The empirical findings reveal that working capital management and leverage are important predictors of company performance, as assessed by Return on Assets, with working capital to total assets and debt to equity having negative and statistically significant effects. In contrast, liquidity, as measured by the Current Ratio, was found to have no substantial direct impact on profitability. Further research, including COVID 19 as a moderating variable, demonstrates that the pandemic only slightly decreased the association between liquidity and business performance, while the effects of working capital management and leverage remained constant. Overall, the findings show that firm-specific financial management practices have a greater impact on FinTech firm performance than external shocks, particularly in technologically advanced and resilient markets like China, Japan, and South Korea, and the study has important implications for policymakers, practitioners, and investors looking to improve financial resilience and long-term growth in the FinTech sector.

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