Blockchain Adoption and Investment Efficiency

Abstract

This study empirically examines the relation between blockchain adoption and investment efficiency. Using a difference-in-differences research design with a sample of U.S. listed firms that indicate adoption of blockchain in business processes in 8-K filings during 2014 to 2019, we find that relative to non-adopters, blockchain adopters exhibit an increase in investment efficiency after the implementation of blockchain technology. Our findings suggest that blockchain adoption improves information quality which in turn affects firms’ price informativeness and information environments, and through which it enhances investment efficiency. Our study provides the first empirical evidence on the real effects of blockchain adoption. The findings are relevant to business communities given that improved efficiency is one of the main goals that many companies seek to achieve from adopting blockchain.