Blockchain-Induced Supply Chain Transparency and Firm Performance: The Role of Capacity Utilization

By: ShinWoo Lee Lee, Jedson Pinto, Daniel Rabetti and Gil Sadka

Format:Print
| Language:English
| Pages:44

Abstract

This study empirically investigates how blockchain adoption affects firm profitability. Employing a quasi-experimental design triggered by regulatory changes across the United States, we provide novel empirical evidence to recent theory, proposing that blockchain adoption increases profitability when capacity utilization is low and reduces profitability when capacity utilization is high. Pinpointing the economic channel, we further demonstrate that blockchain-enabled transparency affects firms’ profitability by reducing costs, with no significant effect on firms’ sales. Finally, we expand the discussion on the effects of blockchain adoption by moving beyond theory to highlight that competition between manufacturers and buyers is a key factor in understanding the impact of blockchain on firms. Collectively, our study is one of remarkably few large sample empirical papers examining the implications of blockchain adoption for firm performance, therefore, providing timely insights into the impact of emerging supply-chain technologies in companies.