Financial technology and corporate idiosyncratic volatility

Based on the model of OLS regression, this article empirically examines the effect of financial technology applications on corporate idiosyncratic volatility. Using Chinese listed companies from 2012 to 2022, this paper find that financial technology and corporate idiosyncratic volatility are negatively correlated. We also demonstrate that financial technology development reduces idiosyncratic volatility by curbing irrational investor preferences and enhancing ESG performance. Furthermore, the relation between financial technology and idiosyncratic volatility is more significant among firms with a thin speculative atmosphere, low CEO power, low level of financialization and higher shareholding of foreign institutional investors.