The Blockchain and Corporate Innovation: Evidence from China

Blockchain technology is a rapidly emerging technology that has attracted widespread attention in recent years. Given that new technology plays a crucial role in driving innovation, this paper investigates whether blockchain technology has a positive impact on corporate innovation. We provide robust evidence that blockchain significantly enhances corporate innovation with a multi-period difference-in-difference model using data from Chinese listed firms between 2010 and 2020. We also discuss possible mechanisms of how blockchain increases innovation. Specifically, the reduction of transaction costs and the enhancement of supply chain financing capabilities are identified as plausible channels for the influence of blockchain on innovation. Heterogeneity analysis shows the positive relation is more pronounced in regions with higher intellectual property protection and marketization. Our findings have important policy implications, suggesting that fostering the development of new technologies can facilitate corporate innovation.