Abstract
The justification of investments in blockchain has puzzled information technology (IT) managers because of the lack of empirical evidence on the benefits generated by blockchain technology. This study addresses this issue by analyzing the return on investment of blockchain from a financial market perspective using calendar-time portfolio analysis. Preliminary findings from 138 announcements by 77 firms that have adopted blockchain reveal positive effects on the firms’ long-term abnormal return of market values. Furthermore, we observed that firms that apply collaborative strategies do not obtain more long-term positive results than individual strategies. Overall, this study provides the first objective evidence of the effects of blockchain adoption on firm financial performance. Such findings present an encouraging message to firms to invest in blockchain and provide insights into how collaborative strategies influence the effects of blockchain adoption on the long-term financial performance of firms.
Recommended Citation
Lui, Ariel K. H. and Ngai, Eric W. T., "The Long Term Effect of Blockchain Adoption on Firm Value" (2019). AMCIS 2019 Proceedings. 5.
https://aisel.aisnet.org/amcis2019/strategic_uses_it/strategic_uses_it/5
The Long Term Effect of Blockchain Adoption on Firm Value
The justification of investments in blockchain has puzzled information technology (IT) managers because of the lack of empirical evidence on the benefits generated by blockchain technology. This study addresses this issue by analyzing the return on investment of blockchain from a financial market perspective using calendar-time portfolio analysis. Preliminary findings from 138 announcements by 77 firms that have adopted blockchain reveal positive effects on the firms’ long-term abnormal return of market values. Furthermore, we observed that firms that apply collaborative strategies do not obtain more long-term positive results than individual strategies. Overall, this study provides the first objective evidence of the effects of blockchain adoption on firm financial performance. Such findings present an encouraging message to firms to invest in blockchain and provide insights into how collaborative strategies influence the effects of blockchain adoption on the long-term financial performance of firms.