Blockchain Speculation or Value Creation? Evidence from Corporate Investments

27 Pages Posted: 23 Jul 2019 Last revised: 23 Dec 2019

See all articles by Don M. Autore

Don M. Autore

Florida State University - College of Business

Nicholas Clarke

Middle Tennessee State University - Department of Economics and Finance

Danling Jiang

College of Business, Stony Brook University

Date Written: December 22, 2019

Abstract

Many corporate executives believe blockchain technology is broadly scalable and will achieve mainstream adoption, yet there is little evidence of significant shareholder value creation associated with corporate adoption of blockchain technology. We collect a broad sample of firms that invest in blockchain technology and examine the stock price reaction to the first public revelation of this news. Initial reactions average close to +15% and are followed by reversals over the next three months. However, we report a striking difference based on the credibility of the investment. Blockchain investments that are at an advanced stage or are confirmed in subsequent financial statements are associated with higher initial reactions and little or no reversal. The results suggest that credible corporate strategies involving blockchain technology are viewed favorably by investors.

Keywords: Blockchain; Bitcoin; Cryptocurrency; Investment Credibility

JEL Classification: G10, G14, G30, G32

Suggested Citation

Autore, Don M. and Clarke, Nicholas and Jiang, Danling, Blockchain Speculation or Value Creation? Evidence from Corporate Investments (December 22, 2019). Available at SSRN: https://ssrn.com/abstract=3385162 or http://dx.doi.org/10.2139/ssrn.3385162

Don M. Autore (Contact Author)

Florida State University - College of Business ( email )

821 ACADEMIC WAY, Room 314 RBA
P.O. Box 3061110
Tallahassee, FL 32306-1110
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850-644-7857 (Phone)

Nicholas Clarke

Middle Tennessee State University - Department of Economics and Finance ( email )

Murfreesboro, TN 37132
United States

Danling Jiang

College of Business, Stony Brook University ( email )

306 Harriman Hall
Stony Brook, NY 11794
United States

HOME PAGE: http://sites.google.com/site/danlingjiang

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