Bharat International Journal of Humanities and Social Sciences
ISSN 0000-0000 | e-ISSN 0000-0000 | EN HI
BIJHSS
BIJHSS Bharat International Journal of Humanities and Social Sciences
Published by Atal Bihari Vajpayee Hindi University अटल बिहारी वाजपेयी हिन्दी विश्वविद्यालय
Articles

FinTech Adoption as a Moderator of the Relationship Between Cost of Capital and Firm Value: Panel Evidence from GCC-Listed Non-Financial Firms

Abdulrahman farouq(1), Zeinab Abdulkhaliq(2), Redwan Ahmed(3), Sur Ali (4), Fatimah Jaafar(5)
1Finance Department, Putra Business School, Selangor, Malaysia
2Finance Department, Putra Business School, Selangor, Malaysia
3Accounting Department, Putra Business School, Selangor, Malaysia
4Finance Department, Putra Business School, Universiti Putra Malaysia, Selangor, Malaysia
5Finance Department, Universiti Putra Malaysia, Selangor, Malaysia
Received2026-03-10
Revised2026-03-16
Accepted2026-08-01
Published2026-08-20

Abstract

FinTech Adoption as a Moderator of the Relationship Between Cost of Capital and Firm Value: Panel Evidence from GCC-Listed Non-Financial Firms

Abstract

This study examines whether FinTech adoption moderates the relationship between the cost of capital and firm value in Gulf Cooperation Council (GCC) capital markets. Drawing on trade-off theory and information asymmetry theory, it uses a balanced panel of 242 listed non-financial firms from 2017 to 2024. Firm value is measured by Tobin’s Q, the cost of capital by the weighted average cost of capital (WACC), and FinTech adoption by a firm-level index derived from textual analysis. The study uses the bias-corrected least squares dummy variable (LSDVC) estimator to account for dynamic panel bias.

The results show a negative association between WACC and firm value. The interaction between WACC and FinTech adoption is statistically significant, indicating that the negative association is stronger among firms with higher FinTech adoption scores. Thus, market valuations are more sensitive to differences in financing costs among firms with higher levels of measured FinTech adoption. The findings suggest that managers and investors should consider firms’ adoption of digital financial technologies when assessing how financing costs relate to market valuation.

Keywords — FinTech adoption, cost of capital, WACC, firm value, Tobin’s Q, dynamic panel data, Gulf Cooperation Council.

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