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When is blockchain worth it? Value and risk drivers of corporate blockchain announcements

Author

Listed:
  • Timo Rogalski

    (TU Darmstadt, Chair of Corporate Finance)

  • Dirk Schiereck

    (TU Darmstadt, Chair of Corporate Finance)

Abstract

In the era of emerging technologies, many firms explore the role of blockchain technology and its impact on corporate market value. Past research has shown that companies benefit from executing blockchain projects, but little is known about specific value and risk drivers. Hence, we provide evidence for several conditions under which blockchain provides additional firm market value. Moreover, we test whether blockchain announcements lead to changes in the systematic risk of firms. Theoretically founded on the resource-based view, we utilize the event study methodology, supplemented by a multivariate regression and a firm’s beta analysis. We find that stock markets react positively to corporate blockchain news if the announcement is related to a blockchain consortium or partnership, is declared by a tech company, or if the announcement is a follow-up announcement to initial blockchain news. Moreover, our findings show that blockchain announcements do not lead to significant changes in a firm’s systematic risk.

Suggested Citation

  • Timo Rogalski & Dirk Schiereck, 2024. "When is blockchain worth it? Value and risk drivers of corporate blockchain announcements," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-24, December.
    • Handle: RePEc:spr:elmark:v:34:y:2024:i:1:d:10.1007_s12525-024-00718-y
    DOI: 10.1007/s12525-024-00718-y
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    More about this item

    Keywords

    Blockchain; Market value; Market risk; Event study;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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