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The impact of blockchain adoption on corporate investment efficiency

Author

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  • Harakeh, Mostafa
  • Diri, Malek El
  • Lambrinoudakis, Costas
  • Tsileponis, Nikolaos

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 post-adoption 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.

Suggested Citation

  • Harakeh, Mostafa & Diri, Malek El & Lambrinoudakis, Costas & Tsileponis, Nikolaos, 2024. "The impact of blockchain adoption on corporate investment efficiency," Economics Letters, Elsevier, vol. 236(C).
    • Handle: RePEc:eee:ecolet:v:236:y:2024:i:c:s0165176524000867
    DOI: 10.1016/j.econlet.2024.111603
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    References listed on IDEAS

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    Cited by:

    1. Lan, Yuan & Xian, Jinkun & Bai, Nannan, 2024. "Digital technology adoption and investment sensitivity to stock price," Economics Letters, Elsevier, vol. 243(C).

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    More about this item

    Keywords

    Blockchain technology; Investment efficiency; Corporate overinvestment;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • G3 - Financial Economics - - Corporate Finance and Governance

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