Can blockchain technology be effectively integrated into the real economy? Evidence from corporate investment efficiency

As a highly disruptive digital technology, blockchain provides new solutions for reshaping corporate governance mechanisms and improving resource alloca-tion. We empirically examine the relationship between blockchain and corporate investment inefficiency. We find that blockchain can help improve corporate investment efficiency, and this result is valid after a series of robustness tests. Blockchain can not only significantly restrain overinvestment but also alleviate underinvestment. Reducing financing costs and alleviating agency conflicts are the two channels through which blockchain is associated with corporate invest-ment efficiency, and financial reporting quality is the condition on which the channels depend. When the CEO holds few shares or the trade credit environ-ment in the region where the company is located is poor, the effect of blockchain is more prominent than it is otherwise. Investment efficiency cannot be improved by blockchain for companies providing blockchain products or services to cus-tomers, only for those promoting their own operations and management with blockchain. Ultimately, blockchain can enhance companies' value by alleviating inefficient investment. We reveal the role of blockchain in corporate investment efficiency, furnish microeconomic evidence for the integration of digital technol-ogy and the real economy and provide implications for China to promote digital technology to drive high-quality company development. & COPY; 2023 Sun Yat-sen University. Production and hosting by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecom-mons.org/licenses/by-nc-nd/4.0/).