Improving Operational Efficiency through Quality 4.0 Tool: Blockchain Implementation and Subsequent Market Reaction
Abstract
Purpose: This article aims to observe and measure how modern and innovative blockchain technology improves the data quality and transparency and thus affect the stock prices of publicly traded companies after announcing its implementation in their operations. Additionally, the objective is to compare the results with control group of non-adopters.
Methodology/Approach: We selected 30 public companies across various sectors, obtained daily stock price data, identified peer companies, and employed an event study approach to examine the statistical impact of blockchain adoption announcements.
Findings: A significant negative reaction (-0.4%) was observed in stock prices the day following a blockchain adoption announcement, but overall, the market response was unsystematic, indicating no consistent reaction in stock prices post-announcement.
Research Limitation/Implication: The event study approach assumes that markets are always efficient. This methodology has some limitations because we live in a world that is not perfect, and stock prices do not necessarily fully reflect all available information.
Originality/Value of paper: Blockchain implementation is a current and intriguing subject that has attracted limited scholarly research. Each new study contributes valuable insights to the understanding of how this innovative technology impacts corporate operations. Furthermore, this research endeavours to draw comparisons between companies that have announced their adoption of blockchain and their non-adopters counterparts.
References
Bose, I. and Man Leung, A.C., 2019. Adoption of identity theft countermeasures and its short- and long-term impact on firm value. MIS Quarterly, [e-journal] 43(1), pp.313-327. DOI: 10.25300/misq/2019/14192.
Boyd, D.E., Kannan, P.K. and Slotegraaf. R.J., 2019. Branded apps and their impact on firm value: A design perspective. Journal of Marketing Research, [e-journal] 56(1), pp.76-88. DOI: 10.1177/0022243718820588.
Bradley, R.V. and Esper, T.L., 2018. The joint use of RFID and EDI: Implications for hospital performance. Production and Operations Management, [e-journal] 27(11), pp.2071-2090. DOI: 10.1111/poms.12955.
Cahill, D., Baur. D.G., Liu, Z. and Yang, J.W., 2020. I am a blockchain too: How does the market respond to companies' interest in blockchain?. Journal of Banking and Finance, [e-journal] 113, 105740. DOI: 10.1016/j.jbankfin.2020.105740.
Campbell, C.J., Cowan, A.R. and Salotti, V., 2010. Multi-country event-study methods. Journal of Banking & Finance, [e-journal] 34(12), pp.3078-3090. DOI: 10.1016/j.jbankfin.2010.07.016.
Chen, K., Lai, T.L., Liu, Q. and Wang, C., 2022. Beyond the blockchain announcement: Signaling credibility and market reaction. International Review of Financial Analysis, [e-journal] 82, 102209. DOI: 10.1016/j.irfa.2022.102209.
Cheng, S.F., De Franco, G., Jiang, H. and Lin, P., 2019. Riding the blockchain mania: Public firms’ speculative 8-K Disclosures. Management Science, [e-journal] 65(12), pp.5901-5913. DOI: 10.1287/mnsc.2019.3357.
Dehning, B., Richardson, V.J., Urbaczewski, A. and Wells, J.D., 2004. Reexamining the value relevance of E-commerce initiatives. Journal of Management Information Systems, [e-journal] 21(1), pp.55-82. DOI: 10.1080/07421222.2004.11045788
Hendricks, K.B., Singhal, V.R. and Stratman, J.K., 2006. The impact of Enterprise Systems on corporate performance: A study of ERP, SCM, and CRM system implementations. Journal of Operations Management, [e-journal] 25(1), pp.65-82. DOI: 10.1016/j.jom.2006.02.002.
Infront Analytics, 2023. Find. Compare. Evaluate. [online] Available at:
Klockner, M., Schmidt, C.G. and Wagner, S.M., 2022. When Blockchain Creates Shareholder Value: Empirical Evidence from International Firm Announcements. Production and Operations Management, [e-journal] 31(1), pp.46-64. DOI: 10.1111/poms.13609.
Lacity, M.C., 2018. Addressing key challenges to making enterprise blockchain applications a reality. MIS Quarterly Executive, 17(3), pp.201-222.
Liu, W., Wang, J., Jia, F. and Choi, T., 2022. Blockchain announcements and stock value: A Technology Management Perspective. International Journal of Operations & Production Management, [e-journal] 42(5), pp.713-742. DOI: 10.1108/ijopm-08-2021-0534.
Melville, N., Kraemer, K. and Gurbaxani, V., 2004. Information technology and organisational performance: An integrative model of IT business value. MIS Quarterly, [e-journal] 28(2), pp.283-322. DOI: 10.2307/25148636.
Mtotywa, M., 2022. Developing a Quality 4.0 Maturity Index for Improved Business Operational Efficiency and Performance. Quality Innovation Prosperity, [e-journal] 26(2), pp.101-127. DOI: 10.12776/QIP.V26I2.1718.
Nguyen, N., Nguyen, Ch., Nguyen, H. and Nguyen, V., 2021. The Impact of Quality Management on Business Performance of Manufacturing Firms: The Moderated Effect of Industry 4.0. Quality Innovation Prosperity, 25(3), pp.120-135. DOI: 10.12776/QIP.V25I3.1623.
Paul, S., Adhikari, A. and Bose, I., 2022. White Knight in dark days? Supply chain finance firms. blockchain. and the COVID-19 pandemic. Information & Management, [e-journal] 59(6), 103661. DOI: 10.1016/j.im.2022.103661.
Ranganathan, C. and Brown, C.V., 2006. ERP investments and the market value of firms: Toward an understanding of influential ERP project variables. Information Systems Research, [e-journal] 17(2), pp.145-161. DOI: 10.1287/isre.1060.0084.
Reno, G., 2022. 12 Things You Can Do to Improve Data Quality. [online] Napperville: FirstEigen. Available at:
Santos, G., Sá, J.C., Félix, M.J., Barreto, L., Carvalho, F., Doiro, M., Zgodavová, K. and Stefanović, M., New Needed Quality Management Skills for Quality Managers 4.0. Sustainability, [e-journal] 13(11), 6149. DOI: 10.3390/su13116149.
Subramani, M. and Walden, E., 2001. The impact of e-commerce announcements on the market value of firms. Available at SSRN:
Tampi, T., 2020. VeriTX to use blockchain to transform aerospace 3D printing supply chain. 3Dprint.com, [online] 02 November. Available at:
Ullah, S., Zaefarian, G., Ahmed, R. and Kimani, D., 2021. How to apply the event study methodology in Stata: An overview and a step-by-step guide for authors. Industrial Marketing Management, [e-journal] 99(November 2021), pp.A1-A12. DOI: 10.1016/j.indmarman.2021.02.004.
Authors
This work is licensed under a Creative Commons Attribution 4.0 International License.