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      Effect of blockchain technology initiatives on firms’ market value

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          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.

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          Most cited references63

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          Risk, Return, and Equilibrium: Empirical Tests

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            Efficient Capital Markets: A Review of Theory and Empirical Work

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              Signaling Theory: A Review and Assessment

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                Author and article information

                Contributors
                haji@mail.ustc.edu.cn
                jiafeiya@mail.ustc.edu.cn
                zhiyuan.lou@tum.de
                jingui.xie@tum.de
                Journal
                Financ Innov
                Financ Innov
                Financial Innovation
                Springer Berlin Heidelberg (Berlin/Heidelberg )
                2199-4730
                1 February 2023
                1 February 2023
                2023
                : 9
                : 1
                : 48
                Affiliations
                [1 ]GRID grid.59053.3a, ISNI 0000000121679639, School of Management, , University of Science and Technology of China, ; Hefei, China
                [2 ]GRID grid.444940.9, School of Commerce and Accountancy, , University of Management and Technology, ; Lahore, Pakistan
                [3 ]GRID grid.35030.35, ISNI 0000 0004 1792 6846, College of Business, , City University of Hong Kong, ; Kowloon Tong, Hong Kong
                [4 ]GRID grid.6936.a, ISNI 0000000123222966, Center for Digital Transformation, School of Management, , Technical University of Munich, ; Heilbronn, Germany
                Article
                456
                10.1186/s40854-023-00456-8
                9889247
                189bb048-dff8-4242-9af8-09e556ce3ca6
                © The Author(s) 2023

                Open AccessThis article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

                History
                : 13 February 2022
                : 10 January 2023
                Categories
                Research
                Custom metadata
                © The Author(s) 2023

                blockchain,operation efficiency,time and cost saving,stock returns,event study

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