CORPORATE GOVERNANCE, BLOCKCHAIN TECHNOLOGY AND FIRM PERFORMANCE

This study examines the impact of blockchain technology (BCT) and corporate governance practices on firm performance. Using GMM on a sample of 2,844 firms, the results show that BCT improves firm performance. The results show an average difference in corporate governance and financial variables between BCT firms and firms from other sectors. In the presence of BCT, independent and female directors, and Top10-Shareholdings no longer positively affect firm performance, while the impact of board size and Largest-Shareholdings become positive. Chief executive officer (CEO)-Duality negatively, while Institutional-Shareholdings positively affect the firm’s performance, either individually or in the presence of BCT. Managerial-Shareholdings showed mixed results. A sub-sample analysis reveals that the role of board size and CEO-Duality becomes ineffective in BCT firms. This study reveals that the monitoring function of corporate governance practices in optimizing agency costs and maximizing firm performance is different in the firms using BCT. Our results hold up to economic parameters such as difference-in-differences and propensity score matching.