Blockchain Applications: The Impact of a Firm's Choice of Financial Accounting System on Nonprofessional Investor Judgment and Decision-Making

36 Pages Posted: 12 Mar 2023

See all articles by Xu Cheng

Xu Cheng

Auburn University

Travis Holt

Auburn University

James H. Long

Auburn University - School of Accountancy

Tina M. Loraas

Auburn University

Abstract

Blockchain technologies have the potential to revolutionize business processes and financial reporting. This study explores how blockchain implementation impacts nonprofessional investor perceptions of transparency and investment decision-making. We conduct an online experiment with 236 nonprofessional investor participants and find that type of financial accounting system differentially affects various antecedents of nonprofessional investor’s intentions to buy or sell shares in a firm. Specifically, when firms employ a traditional accounting system, perceived signal credibility affects perceived investment quality. When firms employ a blockchain-based accounting system, transparency and perceived asymmetries of information influence perceptions of firm trustworthiness, both directly and indirectly. In all cases, perceived investment quality and trustworthiness influence intentions to buy/sell shares. This study provides initial evidence about the potential impact of blockchain technology on nonprofessional investor decision-making.

Keywords: transparency, nonprofessional investors, trustworthiness, PLS, blockchain

Suggested Citation

Cheng, Xu and Holt, Travis and Long, James H. and Loraas, Tina M., Blockchain Applications: The Impact of a Firm's Choice of Financial Accounting System on Nonprofessional Investor Judgment and Decision-Making. Available at SSRN: https://ssrn.com/abstract=4386081 or http://dx.doi.org/10.2139/ssrn.4386081

Xu Cheng

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States

Travis Holt

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States

James H. Long

Auburn University - School of Accountancy ( email )

301 Lowder Hall
Auburn University, AL 36849
United States
(334) 844-6214 (Phone)

HOME PAGE: http://www.jameshlong.com

Tina M. Loraas (Contact Author)

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States

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