IDEAS home Printed from https://ideas.repec.org/a/spr/elmark/v34y2024i1d10.1007_s12525-024-00718-y.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12525-024-00718-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s12525-024-00718-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sara Saberi & Mahtab Kouhizadeh & Joseph Sarkis & Lejia Shen, 2019. "Blockchain technology and its relationships to sustainable supply chain management," International Journal of Production Research, Taylor & Francis Journals, vol. 57(7), pages 2117-2135, April.
    2. Vincenzo Varriale & Antonello Cammarano & Francesca Michelino & Mauro Caputo, 2020. "The Unknown Potential of Blockchain for Sustainable Supply Chains," Sustainability, MDPI, vol. 12(22), pages 1-16, November.
    3. Cynthia Hardy & Nelson Phillips & Thomas B. Lawrence, 2003. "Resources, Knowledge and Influence: The Organizational Effects of Interorganizational Collaboration," Journal of Management Studies, Wiley Blackwell, vol. 40(2), pages 321-347, March.
    4. T. Ravichandran & Simona Ileana Giura, 2019. "Knowledge Transfers in Alliances: Exploring the Facilitating Role of Information Technology," Information Systems Research, INFORMS, vol. 30(3), pages 726-744, September.
    5. repec:dar:wpaper:70422 is not listed on IDEAS
    6. Jan Heinrich Beinke & Kai Rohde & Fabian Pohl & Frank Teuteberg, 2021. "Exploring the Success Factors of Security Token Offerings: An Empirical Approach," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 20(05), pages 1339-1362, September.
    7. Volodymyr Babich & Gilles Hilary, 2020. "OM Forum—Distributed Ledgers and Operations: What Operations Management Researchers Should Know About Blockchain Technology," Manufacturing & Service Operations Management, INFORMS, vol. 22(2), pages 223-245, March.
    8. Gabriella M. Hastig & ManMohan S. Sodhi, 2020. "Blockchain for Supply Chain Traceability: Business Requirements and Critical Success Factors," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 935-954, April.
    9. Prateek Sharma & Samit Paul, 2021. "Game of names: Blockchain premium in corporate names," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1059-1078, July.
    10. Fama, Eugene F. & French, Kenneth R., 2015. "A five-factor asset pricing model," Journal of Financial Economics, Elsevier, vol. 116(1), pages 1-22.
    11. Jiri Chod & Nikolaos Trichakis & Gerry Tsoukalas & Henry Aspegren & Mark Weber, 2020. "On the Financing Benefits of Supply Chain Transparency and Blockchain Adoption," Management Science, INFORMS, vol. 66(10), pages 4378-4396, October.
    12. Brian L. Dos Santos & Ken Peffers & David C. Mauer, 1993. "The Impact of Information Technology Investment Announcements on the Market Value of the Firm," Information Systems Research, INFORMS, vol. 4(1), pages 1-23, March.
    13. Anitesh Barua & Deepa Mani, 2018. "Reexamining the Market Value of Information Technology Events," Information Systems Research, INFORMS, vol. 29(1), pages 225-240, March.
    14. Maximilian Klöckner & Christoph G. Schmidt & Stephan M. Wagner, 2022. "When Blockchain Creates Shareholder Value: Empirical Evidence from International Firm Announcements," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 46-64, January.
    15. Abhishek Borah & Gerard J. Tellis, 2014. "Make, Buy, or Ally? Choice of and Payoff from Announcements of Alternate Strategies for Innovations," Marketing Science, INFORMS, vol. 33(1), pages 114-133, January.
    16. Hinz, Oliver & Nofer, Michael & Schiereck, D. & Trillig, J., 2015. "The Influence of Data Theft on Share Prices and Systematic Risk of Consumer Electronics Companies," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 76072, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    17. Konchitchki, Yaniv & O'Leary, Daniel E., 2011. "Event study methodologies in information systems research," International Journal of Accounting Information Systems, Elsevier, vol. 12(2), pages 99-115.
    18. Guido Schryen, 2013. "Revisiting IS business value research: what we already know, what we still need to know, and how we can get there," European Journal of Information Systems, Taylor & Francis Journals, vol. 22(2), pages 139-169, March.
    19. Alexander Bassen & Dirk Schiereck & Philipp Schüler, 2019. "The success of the activist investor Guy Wyser-Pratte in Continental Europe," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 11(1), pages 24-46.
    20. Hubert Pun & Jayashankar M. Swaminathan & Pengwen Hou, 2021. "Blockchain Adoption for Combating Deceptive Counterfeits," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 864-882, April.
    21. Kobelsky, Kevin & Hunter, Starling & Richardson, Vernon J., 2008. "Information technology, contextual factors and the volatility of firm performance," International Journal of Accounting Information Systems, Elsevier, vol. 9(3), pages 154-174.
    22. Reto Hofstetter & Emanuel Bellis & Leif Brandes & Melanie Clegg & Cait Lamberton & David Reibstein & Felicia Rohlfsen & Bernd Schmitt & John Z. Zhang, 2022. "Crypto-marketing: how non-fungible tokens (NFTs) challenge traditional marketing," Marketing Letters, Springer, vol. 33(4), pages 705-711, December.
    23. Chohan, Raeesah & Paschen, Jeannette, 2023. "NFT marketing: How marketers can use nonfungible tokens in their campaigns," Business Horizons, Elsevier, vol. 66(1), pages 43-50.
    24. Cahill, Daniel & G. Baur, Dirk & (Frank) Liu, Zhangxin & W. Yang, Joey, 2020. "I am a blockchain too: How does the market respond to companies’ interest in blockchain?," Journal of Banking & Finance, Elsevier, vol. 113(C).
    25. Jörg Weking & Michael Mandalenakis & Andreas Hein & Sebastian Hermes & Markus Böhm & Helmut Krcmar, 2020. "The impact of blockchain technology on business models – a taxonomy and archetypal patterns," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(2), pages 285-305, June.
    26. Sanjeev Dewan & Fei Ren, 2011. "Information Technology and Firm Boundaries: Impact on Firm Risk and Return Performance," Information Systems Research, INFORMS, vol. 22(2), pages 369-388, June.
    27. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    28. Bassen, A. & Schiereck, D. & Schüler, P., 2019. "The Success of the Activist Investor Guy Wyser-Pratte in Continental Europe," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 113058, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    29. Brown, Stephen J. & Warner, Jerold B., 1980. "Measuring security price performance," Journal of Financial Economics, Elsevier, vol. 8(3), pages 205-258, September.
    30. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maximilian Klöckner & Christoph G. Schmidt & Stephan M. Wagner, 2022. "When Blockchain Creates Shareholder Value: Empirical Evidence from International Firm Announcements," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 46-64, January.
    2. Klöckner, Maximilian & Schmidt, Christoph G. & Fink, Alexander & Flückiger, Leonie & Wagner, Stephan M., 2023. "Exploring the physical–digital interface in blockchain applications: Insights from the luxury watch industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    3. Wang, Chengfu & Chen, Xiangfeng & Xu, Xun & Jin, Wei, 2023. "Financing and operating strategies for blockchain technology-driven accounts receivable chains," European Journal of Operational Research, Elsevier, vol. 304(3), pages 1279-1295.
    4. Ma, Deqing & Hu, Jinsong, 2022. "The optimal combination between blockchain and sales format in an internet platform-based closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 254(C).
    5. Haji Suleman Ali & Feiyan Jia & Zhiyuan Lou & Jingui Xie, 2023. "Effect of blockchain technology initiatives on firms’ market value," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-35, December.
    6. Li, Zhiwen & Xu, Xianhao & Bai, Qingguo & Chen, Cheng & Wang, Hongwei & Xia, Peng, 2023. "Implications of information sharing on blockchain adoption in reducing carbon emissions: A mean–variance analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 178(C).
    7. Tiwari, Sunil & Sharma, Pankaj & Choi, Tsan-Ming & Lim, Andrew, 2023. "Blockchain and third-party logistics for global supply chain operations: Stakeholders’ perspectives and decision roadmap," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    8. De-Qing Ma & Xiao-Qing Wang & Xue Wang & Jin-Song Hu, 2023. "Achieving Triple Benefits in a Platform-Based Closed-Loop Supply Chain: The Optimal Combination between Recycling Channel and Blockchain," Sustainability, MDPI, vol. 15(5), pages 1-40, February.
    9. Sharma, Prateek & Shukla, Dhirendra Mani & Raj, Alok, 2023. "Blockchain adoption and firm performance: The contingent roles of intangible capital and environmental dynamism," International Journal of Production Economics, Elsevier, vol. 256(C).
    10. Bin Shen & Ciwei Dong & Stefan Minner, 2022. "Combating Copycats in the Supply Chain with Permissioned Blockchain Technology," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 138-154, January.
    11. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
    12. Li, Qingying & Ma, Manqiong & Shi, Tianqin & Zhu, Chen, 2022. "Green investment in a sustainable supply chain: The role of blockchain and fairness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    13. Jason K. Deane & David M. Goldberg & Terry R. Rakes & Loren P. Rees, 2019. "The effect of information security certification announcements on the market value of the firm," Information Technology and Management, Springer, vol. 20(3), pages 107-121, September.
    14. Vahidin Jeleskovic & Yinan Wan, 2024. "The impact of Facebook-Cambridge Analytica data scandal on the USA tech stock market: An event study based on clustering method," Papers 2402.14206, arXiv.org.
    15. Yang Lei & Qiang Zhou & Waiman Cheung & Xiling Cui & Ling Peng, 2023. "Market reaction to the announcement of online sales channel investment in enterprises: Evidence from a relatively stable market environment," Electronic Commerce Research, Springer, vol. 23(2), pages 973-1005, June.
    16. Yu Gong & Yun Zhang & Mohammed Alharithi, 2022. "Supply Chain Finance and Blockchain in Operations Management: A Literature Review," Sustainability, MDPI, vol. 14(20), pages 1-21, October.
    17. Niu, Baozhuang & Dong, Jian & Liu, Yaoqi, 2021. "Incentive alignment for blockchain adoption in medicine supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    18. Biswas, Debajyoti & Jalali, Hamed & Ansaripoor, Amir H. & De Giovanni, Pietro, 2023. "Traceability vs. sustainability in supply chains: The implications of blockchain," European Journal of Operational Research, Elsevier, vol. 305(1), pages 128-147.
    19. Wang, Minxue & Li, Bo & Song, Dongping, 2024. "The impact of blockchain on restricting the misuse of green loans in a capital-constrained supply chain," European Journal of Operational Research, Elsevier, vol. 314(3), pages 980-996.
    20. Zhang, Tianyu & Dong, Peiwu & Chen, Xiangfeng & Gong, Yu, 2023. "The impacts of blockchain adoption on a dual-channel supply chain with risk-averse members," Omega, Elsevier, vol. 114(C).

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:elmark:v:34:y:2024:i:1:d:10.1007_s12525-024-00718-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.