Effect of Blockchain Technology Investment on the Stock Market Reaction, Firm Value, and Financial Performance

Blockchain technology is the most successful emerging technology. It made a massive change in traditional online transactions by eliminating the intermediaries or verifying authorities, and it attracted the attention of firms and investors. In addition, most previous studies agreed that blockchain technology improves transparency, reduces information asymmetry, and increases investors interactions. However, those studies have been conducted in the developed countries, and till now according to the researcher''s knowledge there is a shortage in the studies that investigate the market and financial value of blockchain technology in the developing countries. Therefore, this study investigates the relationship between blockchain technology investment, stock market reaction, firm value, and financial performance in one of the developing countries. Based on 182 observations of 26 financial firms between 2014 and 2020, an empirical study was conducted to examine the relationship between blockchain technology investment and financial performance, and the results revealed a significant positive effect of blockchain technology investment on both return on assets and return on equity. Further, the publicly unlisted firms have been removed to examine the relationship between blockchain technology investment, stock market reaction, and firm value, so the number of observations has been decreased to be 112 of 16 financial firms and the results indicated a significant positive effect of blockchain technology investment on the abnormal return of stocks and Tobin''s q as a measurement of firm value.