The Impact of Blockchain Adoption on Corporate Investment Efficiency

Mostafa Harakeh; Malek El Diri; Costas Lambrinoudakis; Nikolaos Tsileponis

doi:10.1016/j.econlet.2024.111603

The Impact of Blockchain Adoption on Corporate Investment Efficiency

Mostafa Harakeh
, Malek El Diri
, Costas Lambrinoudakis
, Nikolaos Tsileponis^*

^*Corresponding author for this work

Research output: Contribution to journal › Article (Academic Journal) › peer-review

9 Citations (Scopus)

Abstract

This study investigates the impact of blockchain technology adoption on corporate investment efficiency. Utilizing a difference-in-differences methodology on an international sample of Forbes Global 2000 companies between 2012 and 2021, we find that firms implementing blockchain exhibit significantly higher investment efficiency postadoption compared to non-adopters. This effect is more pronounced among ex ante informationally opaque firms. Our results suggest that blockchain adoption reduces overinvesting activities by restricting avenues for managerial discretion through enhanced transparency. Our findings contribute to the growing literature on blockchain’s real economic impacts and inform blockchain adoption decisions by demonstrating investment efficiency benefits.

Original language	English
Article number	111603
Number of pages	4
Journal	Economics Letters
Volume	236
Early online date	13 Feb 2024
DOIs	https://doi.org/10.1016/j.econlet.2024.111603
Publication status	Published - 1 Mar 2024

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© 2024 The Author(s)

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title = "The Impact of Blockchain Adoption on Corporate Investment Efficiency",

abstract = "This study investigates the impact of blockchain technology adoption on corporate investment efficiency. Utilizing a difference-in-differences methodology on an international sample of Forbes Global 2000 companies between 2012 and 2021, we find that firms implementing blockchain exhibit significantly higher investment efficiency postadoption compared to non-adopters. This effect is more pronounced among ex ante informationally opaque firms. Our results suggest that blockchain adoption reduces overinvesting activities by restricting avenues for managerial discretion through enhanced transparency. Our findings contribute to the growing literature on blockchain{\textquoteright}s real economic impacts and inform blockchain adoption decisions by demonstrating investment efficiency benefits.",

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doi = "10.1016/j.econlet.2024.111603",

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AU - Harakeh, Mostafa

AU - El Diri, Malek

AU - Lambrinoudakis, Costas

AU - Tsileponis, Nikolaos

PY - 2024/3/1

Y1 - 2024/3/1

N2 - This study investigates the impact of blockchain technology adoption on corporate investment efficiency. Utilizing a difference-in-differences methodology on an international sample of Forbes Global 2000 companies between 2012 and 2021, we find that firms implementing blockchain exhibit significantly higher investment efficiency postadoption compared to non-adopters. This effect is more pronounced among ex ante informationally opaque firms. Our results suggest that blockchain adoption reduces overinvesting activities by restricting avenues for managerial discretion through enhanced transparency. Our findings contribute to the growing literature on blockchain’s real economic impacts and inform blockchain adoption decisions by demonstrating investment efficiency benefits.

AB - This study investigates the impact of blockchain technology adoption on corporate investment efficiency. Utilizing a difference-in-differences methodology on an international sample of Forbes Global 2000 companies between 2012 and 2021, we find that firms implementing blockchain exhibit significantly higher investment efficiency postadoption compared to non-adopters. This effect is more pronounced among ex ante informationally opaque firms. Our results suggest that blockchain adoption reduces overinvesting activities by restricting avenues for managerial discretion through enhanced transparency. Our findings contribute to the growing literature on blockchain’s real economic impacts and inform blockchain adoption decisions by demonstrating investment efficiency benefits.

U2 - 10.1016/j.econlet.2024.111603

DO - 10.1016/j.econlet.2024.111603

M3 - Article (Academic Journal)

SN - 0165-1765

VL - 236

JO - Economics Letters

JF - Economics Letters

M1 - 111603

ER -

The Impact of Blockchain Adoption on Corporate Investment Efficiency

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