Opportunity or opportunism? Blockchain technology adoption and corporate default risk

Blockchain technology plays a significant role in new technology infrastructure and has a significant influence on artificial intelligence, big data, and 5 G, and its application has been extended to the Internet of Things, digital asset transactions, digital finance, and so on. In financial systems, it could improve the efficiency of data processing, reduce errors, and detect fraud. However, blockchain adoption could increase the stock price and induce manipulation opportunisms. Managers could also use this advantage to mask their performance and increase corporate default risk. Using the data of Chinese listed companies from 2001 to 2021, we investigate whether blockchain technology adoption could increase or decrease corporate default risk. Using the expected default risk model to estimate the risk, the results show that the default risk increases once the firm adopts blockchain technology, which indicates managerial opportunism behavior. The effect works in firms with CEO duality and higher power consolidation. And similar results are also shown in the dual-duty companies. The results are also robust in instrumental variable tests, difference-in-difference tests (DIDs), firm-fixed effect, placebo tests, and other robustness tests.