Effect of blockchain technology initiatives on firms’ market value
Abstract Despite blockchain’s potential to transform corporations by providing new ways of organizing business processes and handling information, extant research pays inadequate attention to how and under what conditions blockchain technology provides additional financial value for shareholders. Dr...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
SpringerOpen
2023-02-01
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| Series: | Financial Innovation |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s40854-023-00456-8 |
| _version_ | 1811171558411993088 |
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| author | Haji Suleman Ali Feiyan Jia Zhiyuan Lou Jingui Xie |
| author_facet | Haji Suleman Ali Feiyan Jia Zhiyuan Lou Jingui Xie |
| author_sort | Haji Suleman Ali |
| collection | DOAJ |
| description | Abstract Despite blockchain’s potential to transform corporations by providing new ways of organizing business processes and handling information, extant research pays inadequate attention to how and under what conditions blockchain technology provides additional financial value for shareholders. Drawing on the efficient market hypothesis and signaling theory, we examined the relationship between firms’ blockchain use, development announcements, and stock market reactions. We used the event study methodology to analyze a sample of blockchain projects initiated by US firms between 2016 and 2019. The sample contains 114 firm-event observations. The findings show that the average abnormal return over a 2 days event period (including the day of the announcement and the day after the announcement) was positive. This positive stock market reaction is even more substantial when firms announce blockchain projects that focus on saving cost or time. Our findings also indicate that blockchain announcements tend to elicit more positive market reactions from smaller firms. We analyzed 249 firm-event observations containing firms from around the world and conclude that blockchain technology has a non-significant long-term impact on operating performance. The contingency approach adopted in our research provides advice for selecting the right mix of blockchain investment initiatives that is most suitable for a given organizational context. |
| first_indexed | 2024-04-10T17:16:00Z |
| format | Article |
| id | doaj.art-4655cd9ba5eb4d60a7a01c629fb0d72e |
| institution | Directory Open Access Journal |
| issn | 2199-4730 |
| language | English |
| last_indexed | 2024-04-10T17:16:00Z |
| publishDate | 2023-02-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj.art-4655cd9ba5eb4d60a7a01c629fb0d72e2023-02-05T12:21:22ZengSpringerOpenFinancial Innovation2199-47302023-02-019113510.1186/s40854-023-00456-8Effect of blockchain technology initiatives on firms’ market valueHaji Suleman Ali0Feiyan Jia1Zhiyuan Lou2Jingui Xie3School of Management, University of Science and Technology of ChinaSchool of Management, University of Science and Technology of ChinaCenter for Digital Transformation, School of Management, Technical University of MunichCenter for Digital Transformation, School of Management, Technical University of MunichAbstract Despite blockchain’s potential to transform corporations by providing new ways of organizing business processes and handling information, extant research pays inadequate attention to how and under what conditions blockchain technology provides additional financial value for shareholders. Drawing on the efficient market hypothesis and signaling theory, we examined the relationship between firms’ blockchain use, development announcements, and stock market reactions. We used the event study methodology to analyze a sample of blockchain projects initiated by US firms between 2016 and 2019. The sample contains 114 firm-event observations. The findings show that the average abnormal return over a 2 days event period (including the day of the announcement and the day after the announcement) was positive. This positive stock market reaction is even more substantial when firms announce blockchain projects that focus on saving cost or time. Our findings also indicate that blockchain announcements tend to elicit more positive market reactions from smaller firms. We analyzed 249 firm-event observations containing firms from around the world and conclude that blockchain technology has a non-significant long-term impact on operating performance. The contingency approach adopted in our research provides advice for selecting the right mix of blockchain investment initiatives that is most suitable for a given organizational context.https://doi.org/10.1186/s40854-023-00456-8BlockchainOperation efficiencyTime and cost savingStock returnsEvent study |
| spellingShingle | Haji Suleman Ali Feiyan Jia Zhiyuan Lou Jingui Xie Effect of blockchain technology initiatives on firms’ market value Financial Innovation Blockchain Operation efficiency Time and cost saving Stock returns Event study |
| title | Effect of blockchain technology initiatives on firms’ market value |
| title_full | Effect of blockchain technology initiatives on firms’ market value |
| title_fullStr | Effect of blockchain technology initiatives on firms’ market value |
| title_full_unstemmed | Effect of blockchain technology initiatives on firms’ market value |
| title_short | Effect of blockchain technology initiatives on firms’ market value |
| title_sort | effect of blockchain technology initiatives on firms market value |
| topic | Blockchain Operation efficiency Time and cost saving Stock returns Event study |
| url | https://doi.org/10.1186/s40854-023-00456-8 |
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