ABSTRACT
Using a sample of listed firms in China, we aim to examine the motivation of blockchain adoption and propose two opposite hypotheses, namely value creation hypothesis and insider selling hypothesis. The empirical results demonstrate that initial blockchain adoption announcement leads to approximately 2% CAAR over the three-day interval around the release, whereas the abnormal return quickly reverses after the announcement, implying that the blockchain adoption can only provide short-term value and against the value creation hypothesis. The finding remains robust for largest industries (manufacturing and information technology) and release channels. On the contrary, we observe a significant positive effect of insider selling on the blockchain adoption announcement, which supports the insider selling hypothesis. Our findings can provide a better understanding on firms’ motivation of blockchain adoption, warn the investors to keep a rational attitude to ‘blockchain hysteria’ when making investment decisions, and motivate the regulators to propose strict information disclosure mechanism and prevent insider selling behaviours.
Acknowledgements
This study is partially supported by the National Natural Science Foundation of China (72103082) and the Social Science Foundation of Jiangsu Province (21EYD005).
Disclosure statement
No potential conflict of interest was reported by the author(s).
Supplementary material
Supplemental data for this article can be accessed online at https://doi.org/10.1080/13504851.2022.2118960.
Notes
1 is the daily return adjusted for capital changes. The computational details can be found in online supplementary material..
2 We consider only the two industries since the size of the remaining industries does not meet the criterion of Bartholdy, Olson, and Peare (Citation2007) and can hardly obtain acceptable size and power in statistical tests of event study. The detailed distribution of sample firms across industries can be found in online supplementary material..