Financial and Operational Consequences of Blockchain Implementations in Supply Chains: Insights from Event Studies and Case Studies
Date: Thursday 23 May 2024 | Time: 14:00 to 15:30
Location: NUBS 2.03
- Guest speakers
This seminar has been organised by the Information Systems and Operations group.
About the speaker
Our guest speaker is Professor Atanu Chaudhuri, Professor in Technology and Operations Management, University of Durham.
Professir Chaudhuri's research interests are:
- supply chains and business models for digital manufacturing (with particular focus on additive manufacturing technologies)
- supply chain risk management
- supply chain integration
He will be presenting his work, entitled "Financial and Operational Consequences of Blockchain Implementations in Supply Chains: Insights from Event Studies and Case Studies".
Abstract
Firms are increasingly adopting blockchain technology (BCT) in their supply chains. However, there is little guidance in the literature on how firms benefit from BCT adoption, specifically under contingencies such as:
- The status of adoption, namely intent versus action
- The motivation of adoption, namely internal versus external
- Firm’s operational and financial vulnerability
- The industry context, namely competitive intensity and growth
We use event study and difference-in-difference methodology on a sample of 128 firms announcing BCT adoption between 2016 and 2020, and provide empirical evidence on the relationship between BCT adoption in supply chains, market returns, and operational performance under different contingencies of adoption.
We show that a firm’s announcement of BCT adoption increases the firm’s Cumulative Average Abnormal Returns (CARs) by 5.6% over a 15-day event window. Additionally, we find that the CARs for announcements of future adoption intent (speculative) are 6.3% lower than for announcements backed by actual implementation efforts (non-speculative). Furthermore, industry growth and the industry competitive intensity significantly explain the higher CARs, improvement in return on assets (ROA), and decrease in the total cost on sales (TCOS) of firms.
BCT adoption due to internal motivation reduces TCOS; however, no significant impact on cost occurs when the adoption motivation is external. We find that the improvement in ROA is mediated through the decrease in the TCOS from BCT adoption.
Practically, this study acts as a guide to managers in understanding the financial and operational value of BCT in supply chains under different contingencies.
In the second part of this talk, I will discuss the socio-technical capabilities needed for BCT implementation by service providers using multiple case study of projects with transaction time reduction and quality improvement objectives and the role of outcome and behavioural mechanisms in improving social sustainability and reducing supply chain risks through BCT implementation.