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Blockchain technology and enterprise operational capabilities: An empirical test
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International Journal of Information Management journal homepage: www.elsevier.com/locate/ijinfomgt
Blockchain technology and enterprise operational capabilities: An empirical test ⁎
Xiongfeng Pana, Xianyou Pana, Malin Songb, , Bowei Aia, Yang Minga a b
School of Economics and Management, Dalian University of Technology, Dalian, China School of Statistics and Applied Mathematics, Anhui University of Finance and Economics, Anhui, China
A R T I C LE I N FO
A B S T R A C T
Keywords: Blockchain technology Enterprise operational capabilities Trust climate Supply chain management Business transformation
As a new type of disruptive internet technology, blockchain technology is widely used as a technical support for enterprises to improve production processes and reduce costs. This paper reveals that existing research has only focused on the business process modelling and technology design process of a blockchain-based solution and has neglected analysis of the relationship between blockchain technology and enterprise operational capabilities based on actual data. Hence, this paper collects 50 listed blockchain technology enterprises in China and quantitatively analyses them. The results show that the expansion of the enterprise asset scale is a significant driving factor for implementing blockchain technology. In addition, this paper proves that implementation of blockchain technology has a positive impact on improving asset turnover rate and reducing sales expense rate. Based on the results of theoretical and empirical analysis, this paper provides some constructive suggestions for constructing blockchain projects in the future.
1. Introduction Operational capabilities (hereafter OCs) represent organisational abilities that allow an enterprise to “make a living” (Winter, 2003) and they do this typically by realizing competitive advantage via improved processes whereby reducing firm costs (Miocevic & Morgan, 2018). Promoting the transformation of enterprises and improving their OCs are the most important tasks of global enterprises (Lu, Rong, & You, 2014; Zhang & Chen, 2018). At the same time, the rapid development of information technology provides an excellent opportunity for enterprises to improve management models and enhance OCs, thereby supporting the enterprises to provide products and services with high value-added to consumers (Akter, Wamba, & Barrett, 2018; Cotteleer & Bendoly, 2006; Karabasevic, Zavadskas, Stanujkic, Popovic, & Brzakovic, 2018). The annual World Economic Forum 2016 themed "controlling the fourth industrial revolution" was held in Switzerland in January 2016, and it also noted that information technology would bring a "new normal" to global economic growth. Blockchain technology (hereafter BT) can be defined as a distributed ledger database for verifiably and permanently recording transactions among parties (Perboli, Musso, & Rosano, 2018). It has gradually attracted attention in various fields, due to its unique consensus mechanism and compatible encryption algorithms (Hughes et al., 2019; Lu
& Xu, 2017). From the perspective of enterprises, the effective integration of internal and external information resources plays an important and positive role in improving enterprises’ OCs (Dubey, Gunasekaran, Childe, & Papadopoulos, 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017; Eltayeb, Zailani, & Ramayah, 2011; Pan, Zhang & Song, 2018). BT overcomes many problems related to information sharing and resource integration in traditional enterprise management and external collaboration, and it also spawns a new business operation and management model (Kshetri, 2018; Nakasumi, 2017). However, there are still many obstacles to the development of BT and its application. The State Council’s guidance on actively promoting “Internet Plus” notes that traditional enterprises lack the awareness and ability to use internet information technology and that there are many obstacles, such as capital and talent shortages, in the development of new formats. Moreover, although many organizations are aware of the potential of BT, few have concrete initiatives to implement this technology (Ying, Jia, & Du, 2018). Up to data, most of scholars paid their attention to the business process modelling and presented a meta-model for executing secure business transactions using BT and an enterprise operating system. Moreover, they intended to solve the security risks involved in business transactions executions to increase trust, authenticity, robustness, and traceability against fraud. In terms of specific application, they moved
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Corresponding author. E-mail addresses: [email protected] (X. Pan), [email protected] (X. Pan), [email protected] (M. Song), [email protected] (B. Ai), [email protected] (Y. Ming). https://doi.org/10.1016/j.ijinfomgt.2019.05.002 Received 4 February 2019; Received in revised form 26 April 2019; Accepted 8 May 2019 0268-4012/ © 2019 Elsevier Ltd. All rights reserved.
Please cite this article as: Xiongfeng Pan, et al., International Journal of Information Management, https://doi.org/10.1016/j.ijinfomgt.2019.05.002
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the primary responsibility for linking business function into a cohesive and high-performing business model, and it has an important impact on improving enterprise OCs (Wu & Chiu, 2018). BT is used to provide technology support in external collaboration and optimization because of some intrinsic characteristics, such as data integrity and decentralized operations (Kshetri, 2018). In the following parts, we discuss the characteristics attributed to BT and the influence mechanism of BT on enterprise OCs from two perspectives, internal operation and external collaboration.
the attention of BT to various domains in past years (Caro, Ali, Vecchio, & Giaffreda, 2018; Di et al., 2018; Nakasumi, 2017; Queiroz & Wanba, 2019; Tian, 2017), such as legal areas (Gurkaynak, Yilmaz, Yesilaltay, & Bengi, 2018), energy sector (Aitzhan & Svetinovic, 2018; Kim & Huh, 2018), finance (Treleaven, Brown, & Yang, 2017) and the others (Weber, Xu, Riveret, Guido, Alexander, & Jan, 2016; Ying et al., 2018). In addition, BT represented the backbone of a new digital supply chain (Figorilli et al., 2018; Kshetri, 2018; Toyoda, Mathiopoulos, Sasase, & Ohtsuki, 2017; Yoo & Won, 2018). Because of its capability of ensuring data immutability and public accessibility of data streams, BT increases the efficiency, reliability, and transparency of supply chain management (Wamba, Angappa, Papadopoulos, & Eric, 2018; Wamba, Kamdjoug, Bawack, & Keogh, 2018). Moreover, BT is already transforming and remodelling the relationships between all members of logistics and supply chain systems (Queiroz & Wanba, 2019). Through the above literature reviews, we observed that the existing literature has primarily considered the business process modelling and technology design processes of a BT-based solution. However, the research results have often verified the implementation effect of BT, based on the simulation methods. In particular, there is limited evidence of the value of the BT and the overall costs and benefits, preventing the development of real cases. The consequence is, as highlighted in the report of Trujillo, Fromhart, and Srinivas (2018), there are few BT projects with high longevity. Only 8% of projects are actively maintained, while the others fail. Our primary aim of this study was hence to discover the impact of BT on the enterprise OCs. Consequently, our overarching research question was: ‘How will BT affects enterprise OCs?’ Through the internal operation and external collaboration, we tried to analyze how BT will affect enterprise OCs from these two aspects. Through this enquiry, we expected to gain insights into the following sub-questions:
2.1. BT characteristics From a system design standpoint, the key characteristics of the BT are listed as follows (Perboli et al., 2018; Treiblmaier, 2018). 2.1.1. Open distributed ledger The BT is designed to be decentralized. Thus, the database is distributed, and copies of all information are shared among the participants. They can validate this information without a centralized authority. The decentralization, combined with the real-time updating of information, makes BT useful in networks involving different organizations. 2.1.2. Few intermediary third parties A traditional business transaction involves two parts: a public ledger entry about the transaction and private messages between the parties involving identities, security keys for transactions and location. The combination of these two parts and the decentralization of the system (accessible to anyone who validates) make it possible to avoid an intermediary third party, and execute a transaction with limited cost and time in a secure manner.
RQ1. What are BT’s perceived benefits to enterprise internal operations?
2.1.3. Consensus-based and trustiness The participants independently validate a transaction. Due to the decentralized storage and the presence of more than one copy of the database, the participants must agree on the source of the truth to verify the transaction. The consensus mechanism helps to avoid mistakes or fraudulent actions that could affect the database.
RQ2. How does BT could impact on enterprise external collaboration? RO3. Based on question (1) and (2), is BT really beneficial to the improvement of enterprise OCs in reality? Compared with the existing literature, this paper contributes to the literature in two areas. First, we integrated the other contributions and propose a standard model to explore the influence mechanism of BT on enterprise OCs. In particular, from the two aspects of internal operation and external collaboration, we deeply analyzed the influence mechanism of BT on enterprise OCs; Second, we collected relevant information from BT listed enterprises and quantitatively verified the impact of implementing BT on enterprise OCs. Contrary to contributions based on simulations technology of the past researches, an essential aspect of the novelty of this paper was that our analysis refers to various enterprises that have actually implemented BT. The remainder of this paper is organized in the following manner. In Section 2, we explore how BT impacts enterprise OCs. In Section 3, we provide an overview of model setting and data description. Section 4 presents and analyses the empirical results. Section 5 concludes the paper with the implications of our research, limitations of the study and directions for future research.
2.1.4. Cryptographically sealed and immutability of data One of the most important pillars of BT is cryptography. In fact, once the transaction has been validated and recorded, cryptographic technologies are needed for the digital signatures and data integrity, avoiding the manipulation of a block. 2.1.5. Rules to share data Participants govern the BT. In advance, they agreed on the types of transaction, which are stored in the chain as smart contracts. 2.2. BT and enterprise OCs——from the perspective of internal operation With the increasingly fierce market competition, the uncertainty and complexity of the enterprise’s living environment are becoming more and more significant (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017). Agency theory emphasizes that formal control and supervision facilitates business operations management (Jensen & Meckling, 1976). However, scholars note that these formal controls have many shortcomings in explaining and predicting managerial behaviour (Davis, Schoorman, & Donaldson, 1997). They emphasize the role of informal factors, such as commitment and trust in internal corporate governance. Moreover, Hosmer (1995) highlights that the principle of maintaining commitment within the enterprise is maintaining honesty, rather than using the weaknesses of the other part to obtain benefits. Sheng (2019) focuses on three organizational practices, namely, entrepreneurial competence, relationship harmony, and information communication technology
2. Theoretical background Knowledge and information sharing are important to achieve effective cooperation among different organizations and departments (Cao, Duan, & Cadden, 2019; Fiorini & Jabbour, 2017; Liu, Felix, Yang, & Niu, 2018; Zhu, Peng, & Zhang, 2018). Within an enterprise, BT not only introduces the trust mechanism and reduces the cost of online transactions, but also rebuilds the incentive mechanism to improve the organizational synergy efficiency (Funk, Riddell, Ankel, & Cabrera, 2018). Moreover, external collaboration is an integrating function with 2
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Fig. 1. Inter-enterprise value link based on BT.
mostly for the liquidation of financial assets, the use of smart contracts, etc; Blockchain 3.0 is an extension based on 2.0, with a particular emphasis on extending the BT into more aspects of social life. From the view of specific application, in the financial services field, the BT continues to deepen in payment, transaction clearing, trade finance, digital currency, equity and risk control (Treleaven et al., 2017). In the field of social management, the BT promotes proxy voting, identity authentication, and personal social credit (Figorilli et al., 2018). In the aspect of Internet of Things, the BT continues to focus on product information traceability, network security, and contracts (FernandezCarames & Fraga-Lamas, 2018). Supply chain is a complex functional network consisting of suppliers, manufacturers, distributors, retailers, consumers, logistics, and other related companies from raw materials to final products (Balasubramanian & Shukla, 2018; Mohamed, Egilmez, Kucukvar, & Bhutta, 2017). It is proposed that the supply chains will collaborate with one another through trust foundations, connect individual enterprises and build a composite network, ultimately optimizing the overall efficiency and bringing greater benefits to related enterprises on the chain (Chi, Wang, Lu, & George, 2018; Namagembe, Ryan, & Sridharan, 2018; Woo, Kim, & Chung, 2016). In particular, effective supply chain management measures promote information sharing within the supply chain and have a positive impact on improving the OCs of enterprises; Moreover, the diversity of customer needs puts higher demands on supply chain agility. Effective supply chain management promotes the acquisition of external customer knowledge and better adapt to the external environment, thereby improving its OCs. Therefore, supply chain management is a strategic orientation of the enterprise, and it involves various aspects such as internal enterprises, customers and suppliers. If the enterprises can properly handle these integration relationships, it can enhance the OCs of the enterprises and profit from it. However, the information island phenomenon is prevalent in the current supply chain operation (Dominguez, Cannella, Barbosa-Povoa, & Framinan, 2018). In particular, information is discretely distributed among different enterprises in the supply chain, with low degree of sharing, slow operation and poor information authenticity and reliability. With the development of BT, establishing a supply chain information platform with BT as the core can effectively link supply chain alliances, financial institutions and government regulatory departments, and promote the integration of business flow, logistics, capital flow and information flow in the supply chain (Kamble, Gunasekaran, & Arha, 2019; Queiroz & Wanba, 2019; Wang, Han, & Davie, 2019; Wang, Singgih, Wang , & Rit, 2019). As shown in Fig. 2, the BT platform for supply chain management is built on top of various core technologies, such as hardware, network, data, consensus, and incentive layers. Some platform systems can be implemented based on modules, such as monitoring systems, upgrade systems, node management systems,
competence, which are potential enhancements to enterprise’s capability. In addition, trust can be an effective complement to the formal internal organization mechanism and play a flexible and effective role in the corporate governance (Dyer & Chu, 2003). A good atmosphere of trust within the enterprise helps organizations and individuals to avoid economic benefits loss through knowledge sharing (Chai & Kim, 2010). At the organization and team level, knowledge sharing means passing, acquiring, organizing and storing knowledge so that they can be used effectively. For the individual, knowledge sharing means communication and learning between colleagues, which makes them complete work or solve problems more effectively (Nelson & Cooprider, 1996). As shown in the Fig. 1, first, the BT combines the data structure in the form of chains in chronological order, which effectively integrates information, prevents information from being falsified, and ensures the security and reliability of data. Secondly, the development of BT is based on information encryption technology and the application of related platforms. Blockchain participants ensure the information and trust security of each node through computer cryptography algorithm, which effectively ensures the information communication and sharing between departments. Therefore, the building of trust mechanism based on BT is helpful to form a trust atmosphere within the enterprise, improve the enterprise's internal knowledge stock and flow levels, shape core competitiveness and enhance the enterprise OCs (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017). Moreover, the consensus mechanism of BT ensures the fairness among the various departments within an enterprise. Specifically, the BT establishes the synergy relationship of the entire process nodes and constructs the participation rules and incentive mechanisms (Fernandez-Carames & Fraga-Lamas, 2018). At the same time, BT realizes the circulation of assets, and it transforms talent and creativity into digital assets. Eventually, the creative contribution history of each person can be objectively recorded in the form of digital assets, and the checkout incentives can be automatically confirmed (He et al., 2018). In addition, relying on the BT consensus mechanism and related technologies, such as big data and artificial intelligence, enterprises can handle complex data and information effortlessly, adjust internal business rules and develop effective operational processes (Dinh et al., 2018; Wamba, Angappa et al., 2018; Wamba, Kamdjoug et al., 2018).
2.3. BT and enterprise OCs——from the perspective of external collaboration BT applications have evolved from the blockchain 1.0 era to the blockchain 3.0 era. Among them, blockchain 1.0 era refers to the application of BT in virtual digital currency market such as currency transfer and payment system; Blockchain 2.0 refers to the application of BT in financial markets such as securities, futures, loans and bills, and 3
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Fig. 2. Enterprise external cooperation based on block-chain technology.
equipment, Internet and so on) and 18 regions (Beijing, Shengzhen, Zhengjiang and so on). And then, we collected their annual financial data from 2012 to 2017 from the Reset database. In order to ensure the validity of the data, we excluded the listed companies with short timeto-market (or just major asset restructuring) and the companies with missing data. Moreover, the key financial indicators of the enterprise (such as total assets, fixed assets, and current liabilities) could not be missing, otherwise it was deleted. Finally, 50 sample data that met the requirements were obtained.
contract management systems, and so on. Based on the platform module and system, the BT implements the specific services required in the actual scenario of supply chain management, such as providing operational services, reporting services, data management and analysis in data services. In addition, the BT provides specific business content, such as purchasing services, financial services and risk control services in supply chain management. By building a BT-based supply chain management platform, enterprises can capture massive amounts of data and record commodity circulation information based on source tracking, certificate storage, mutual trust, and information communication so as to effectively meet the supply chain requirements (Nakasumi, 2017). Moreover, connecting supply chain-related companies and promoting the integration of commodity flows, logistics, capital flows and information flows can reduce operating costs and improve operating quality (Aydiner, Tatoglu, Bayraktar, and Zaim (2019); Khouri, Rosova, Straka, & Behun, 2018; Perboli et al., 2018).
3.2. Model construction First, the application of BT has a distinct "scale economy" feature. Specifically, with the expansion of enterprise scale, the business related to the BT can exert greater advantages in analysing the enterprise’s economic behaviour, mining the law of corporate behaviour, and improving the enterprise’s operational efficiency (Bottazzi, Dosi, Lippi, Pammolli, & Riccaboni, 2001). At the same time, the diversified and complex business environment makes the traditional centralized supply chain management model unsustainable (Wamba, Angappa et al., 2018; Wamba, Kamdjoug et al., 2018). Therefore, we examined the basic motivations of enterprises to implement BT-related business from the perspectives of enterprise asset size, staff size and sales scale. In order to analyze the above problems, we first grouped the enterprise samples and constructed a logistic regression model. The dependent variable here is – whether to implement the BT, that is, "yes" or "no", which is a categorical variable. Secondly, the explanatory variables mainly include the total asset size, sales revenue scale and employee size. Moreover, due to the uneven annual distribution of the BT enterprise sample, the Year dummy variable was used as a control variable to control the influence of other external factors. The model was built as follows:
3. Data description and model construction 3.1. Sample selection Due to the lack of suitable business news database in China, according to the research of Zheng, Wu, and Kahn (2012), we directly used the Baidu search engine to manually search for the related reports on the implementation of BT by Chinese A-share listed enterprises. The reason why Baidu Search was chosen is that it is the largest Chinese search engine in the world and has the largest Chinese webpage library in the world. It may provide more detailed reports on the BT of Chinese enterprise. The keywords used for the search are listed enterprise abbreviation and blockchain technology. For a listed enterprise with a special abbreviation, we used its stock code or full enterprise name instead of enterprise abbreviation. All BT listed companies in China A-shares were searched one by one. As shown in Figs. 3 and 4, as of June 2018, there are 77 BT listed companies based on A-shares, which are distributed in 25 major industries (e.g., software services, computer
BTit = a1 Assetsit + a2 Salesit + a3 Staffit + Year + εit
Model 1.
In Model 1, BTit is a 0–1 categorical variable, which represents the 4
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Fig. 3. Regional distribution of China’s BT enterprises.
regression method.
implementation of BT of enterprise i in t year. Assetsit represents enterprise’s total asset size, Salesit represents enterprise’s sales revenue scale, Staffit represents enterprise’s employee size. In the test of the model, because the values of BTit are equal to 0 (left-censored) or 1 (right-censored), the Tobit regression method was used in the empirical analysis process. It was proposed by Tobin (1958) and describes the association between non-negative dependent variables (latent variables) and independent variables when the data are censored or truncated. Second, we further verified the impact of implementing BT on enterprise OCs. The concrete form of the empirical analysis model is as follows:
3.3. Variable selection and description 3.3.1. Operational capabilities Operation management plays a vital role in the enterprises’ daily operations, and it reflects the effectiveness of business operations and the dynamic responsiveness (Jantunen, Tarkiainen, Chari, & Oghazi, 2018). The primary objectives of enterprise operation management are to reduce production, manufacturing and transport cost, increase profit margins, and produce high-quality products at the lowest operating cost (Prajogo, Toy, Bhattacharya, Oke, & Cheng, 2018). Hence, in this paper, we primarily used three kinds of indicators to measure enterprise OCs, including enterprise total asset turnover rate (ATurnover), enterprise current assets turnover rate (ETurnover) and enterprise sales expense ratio (SCRation). Among them, the ATurnover is measured by the ratio of the net sales income of the enterprise to the average total assets in a certain period. ETurnover is the ratio of the net income of the main business to the average total current assets in a certain period, and SCRation is the ratio of sales expenses to operating income of the enterprise.
OCsit = β1 BTit + γ1 Leverageit + γ2 Salesit + γ3 Assetsit + γ4 Staffit + εit
Model 2.
In Model 2, OCsit reflects the OCs of enterprise i in t year. BTit, the core explanatory variable in the model, reflects the implementation of BT. β1, the regression parameter to be estimated, reflects the impact of implementing BT on enterprise OCs. At the same time, considering the availability and comparability of financial index of listed companies, we used the financial leverage ratio (Leverage), the average employee sales revenue (Sales), total asset size (Asset), total staff size (Staff) and the Year dummy variable as the control variables. εit is normally, identically and independently distributed error term. In the test of the model, we used the linear ordinary least squares method as the basic
3.3.2. Blockchain technology BT has been implemented in all samples, and only the implementation year is different. At the same time, from the publicity of
Fig. 4. Industry distribution of China’s BT enterprises. Note: Limited by the requirements of the layout, we only listed the top five industries. Readers who require more detailed data can contact the author. 5
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blockchain project, BT has a significant impact on enterprise OCs. Therefore, the first two years, the previous year, the current year and the following year of the implementation of the BT are the years related to the implementation, where the BTit value is 1 and the BTit value of the other years is 0.
Table 2 Test results of the determinants for implementing BT. Variable
Tobit-Model Coef
Asset Staff Sales cons Year Number of obs R-squared LR chi2(8) Log likelihood 4Root MSE F(8,291)
3.3.3. Control variables Asset and staff are the most basic units of business operations, and they play important roles in business operations. From the perspective of cost, the increasing of employee numbers and assets size affect the enterprise operating costs and the enterprise OCs. Therefore, we considered the total number of employees (Staff) and the total amount of corporate assets (Asset) as the control variables. Among them, Staff is represented by the sum number of enterprise's employee. Asset is the total amount of assets owned or controlled by the enterprise. According to the financial management theory, security, liquidity and profitability are the basic principles that must be followed in business management (Gan, Wei, Wang, & Zheng, 2018). As a ratio of equity capital to total assets in the balance sheet, Leverage measures the liability risk and operational security of one enterprise, and also reflects the enterprise's repayment ability. At the same time, Sales reflects the ability of the enterprise to obtain profits, which is usually expressed by the level of corporate income in a certain period.
Ordinary Least Square Std.Err
**
0.177 −0.070 −0.091 −0.589* Y 300 0.706 439.20*** −91.321 – –
0.096 0.063 0.093 0.378
t-value 1.85 −1.12 −0.98 −1.56
Coef **
0.110 −0.034 −0.061 −0.352* Y 300 0.782 – – 0.227 130.39***
Std.Err
t-value
0.061 0.038 0.059 0.246
1.79 −0.91 −1.04 −1.43
Note: ***, ** and * in the table indicate p < 0.01, p < 0.05 and p < 0.1, respectively.
4.3. The impact of BT implementation on enterprise OCs To test the impact of BT implementation on enterprise OCs, according to variables selection and model construction, we conducted a comprehensive test from three aspects: total asset turnover rate, current asset turnover rate and sales expense rate. We tested the specific form of the panel model using the Hausman test, and then we analysed the influence of BT implementation on enterprise OCs based on the fixed effect or the random effect model. The specific regression results are shown in Table 3. Observing Table 3, the regression coefficient of BC is positive and significant at the level of 5%, which means that the implementation of BT has a positive impact on the enterprise OCs. Using the current asset turnover rate as the main dependent variable, the regression coefficient of BC is still positive and passes the 10% significance level test. In addition, from the sales expense ratio perspective, the regression coefficient of BC is negative and significant at the 10% level, which means that the development of BT effectively reduces the sales expenses of enterprises. To test the robustness of the above conclusions, we retested the relationship between BT implementation and enterprise OCs based on maximum likelihood estimation, and listed the results in Table 4. The results prove that the conclusions obtained in this paper are robust.
4. Results 4.1. Sample test Table 1 shows the descriptive statistics, Pearson’s correlation coefficients and variance inflation factors (VIFs) of variables. None of the correlation coefficients are greater than 0.8. VIFs are between 1 and 4 and less than the recommended maximum threshold of 10 (Gujarati, 2011), and the mean of VIF is equal to 1.99. Thus, the multicollinearity between non-interacted independent variables is not a concern (Meng, Zeng, & Tam, 2013). 4.2. Test of the BT determinant Based on Model 1, we examined the determinants of BT implementation. As shown in Table 2. The regression coefficient of Asset is equal to 0.177 and passes the significant test at the 5% level, indicating that the enterprise’s total asset size has a significant positive impact on the implementation of BT. However, this positive impact is not reflected in the increasing of the enterprise employee size and the expansion of enterprise sales revenue. To test the robustness of the results, we employed the linear ordinary least squares method to testify the above results again. As shown in the right column of Table 2, the values and symbols of the regression coefficients do not significantly change, which indicates that the conclusions obtained in this section are robust.
5. Discussion 5.1. Main findings BT is a distributed ledger database for verifiably and permanently recording transactions between parties. With the advancement of research and development made by scholars, it provides a good opportunity for the improvement of enterprise OCs. However, there are still
Table 1 Descriptive statistics, Pearson’s correlation coefficients and VIFs of variables. Variable
Obs
Mean
Std.Dev.
Min
Max
SCRation
ATurnover ETurnover SCRation BT Asset Staff Leverage Sales VIFs
300 300 300 300 300 300 300 300
0.610 0.978 0.969 0.353 9.571 3.436 0.827 1.870
0.392 0.570 0.039 0.479 0.563 0.530 1.087 9.334
0.073 0.106 0.838 0.000 8.294 1.708 0.044 0.077
2.035 2.627 1.077 1.000 11.243 4.627 9.544 128.722
1.000 −0.091 −0.291 −0.126 −0.284 −0.356
BT
Asset
Staff
Leverage
Sales
1.000 0.291 0.078 0.073 0.125 1.55
1.000 0.627 0.635 0.188 3.55
1.000 0.279 −0.186 2.13
1.000 0.076 1.85
1.000 1.26
Note: Limited by the layout, only the correlation coefficient matrix and the collinearity test result of the sales expense rate are provided here. However, the results of total asset turnover rate and current asset turnover rate all meet the requirements of the correlation coefficient test and VIFs test. Readers can contact the author of this paper and request additional test results. 6
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Table 3 Impact of the implementation of BT on enterprise OCs. Variable
ATurnover Coef
BC Asset Staff Leverage Sales cons Year Number of Obs R-squared F test Hausman
ETurnover Std.Err
**
0.091 −0.307*** 0.352*** 0.081*** 0.012*** 2.317*** Y 300 0.438 22.77*** 16.32**
0.043 0.062 0.060 0.021 0.001 0.496
t-value 2.10 −4.94 5.84 3.82 8.75 4.67
SCRation
Coef
Std.Err *
0.124 −0.746*** 0.944** 0.089** 0.014*** 4.718*** Y 300 0.385 17.98*** 14.77**
0.072 0.103 0.100 0.035 0.002 0.820
t-value
Coef
1.72 −7.26 9.46 2.53 6.47 5.83
−0.092 −0.057 −0.093* 0.005 −0.013*** −0.367 Y 300 0.301 – 6.17 **
Std.Err
t-value
0.048 0.064 0.061 0.022 0.001 0.505
−1.91 −0.90 −1.52 0.24 −8.58 −0.73
Note: ***, ** and * in the table indicate p < 0.01, p < 0.05 and p < 0.1, respectively.
standard model to explore the influence mechanism of BT on enterprise OCs. In particular, from the two aspects of internal operation and external supply chain management, we deeply analyzed the influence mechanism of BT on enterprise OCs. We suggested that the implementation of BT effectively solves the problem of information asymmetry among internal departments and rebuilds a unique credit mechanism based on technology trust. At the same time, the unique consensus mechanism of the BT can quickly build a member incentive mechanism in a system with decentralized decision-making power, ensuring that all departments within the enterprise can effectively reach a consensus on the target. On the other hand, BT is a kind of decentralized high-trust distributed database technology, which has the characteristics of traceability and information resistant to tampering. Thus, establishing a supply chain management platform based on BT can connect the supply chain alliance effectively, build a trusting supply chain ecosystem, and improve OCs of supply chain member. Secondly, note that past studies have primarily considered the business process modelling and technology design process of a BT based solution, and they lack the test of implementation effect of BT. In particular, there is limited evidence on the value for the actors, as well as the overall costs and benefits, preventing the development of real cases. Thus, we collected sample data from 50 BT-listed companies and explored the prerequisites for implementing BT in enterprise. Then, we quantitatively verified the impact of the implementation of BT on the enterprise OCs. We pointed out that if an enterprise wants to invest in BT and achieve higher return, its rational decision is to implement BT in an appropriate chance (Gunasekaran, Subramanian, & Papadppoulos, 2017). When the enterprise was in a period of rapid growth, the expansion of business scale promoted managers to implement BT, so that the enterprise can establish closer contact with partners. At the same time, enterprises with rapid growth rate usually have better cash flow, which is conducive to overcoming the "organizational inertia" and
many obstacles to the development of BT and its application. Our primary aim in this study was hence to discover the impact of BT on the enterprise OCs. We proposed that BT not only introduces the trust mechanism and reduces the cost of online transactions within an enterprise, but also rebuilds the incentive mechanism to improve the organizational synergy efficiency. On the other hand, we suggested that BT was helpful to provide technology support in supply chain management and optimization because of some intrinsic characteristics, such as data integrity and decentralized operations, and it has a significant impact on enterprise OCs. In order to confirm the theoretical inference mentioned above, we collected 50 block-chain technology listed enterprises in China and quantitatively analysed the impact of the implementation of BT on enterprise OCs. The results show that the enterprise’s total asset scale is the most important factor in implementing BT. In particular, for the same type of enterprises, enterprises with larger scale are more inclined to adopt BT. Moreover, we measured the enterprise OCs from three aspects: the total asset turnover rate, current assets turnover rate and sales expense rate. The empirical results indicate that the implementation of BT has indeed led to positive impacts on the improvement of enterprise OCs. 5.2. Theoretical contribution As a new technology with broad prospects, BT can automatically build a trust system, implement value exchange and continuously promote the improvement of enterprise OCs. For enterprises, it is helpful to overcome obstacles related to information sharing and resource integration in traditional enterprise operational management (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017; Pan et al., 2018). This study contributes to the extant literature in two ways. Firstly, we integrated the other contributions and proposed a Table 4 Robustness test of the effect of BT on enterprise OCs. Variable
ATurnover Coef
BC Asset Staff Leverage Sales cons Year Number of Obs Log likelihood LR chi2(10)
ETurnover Std.Err
**
0.078 −0.276*** 0.401*** 0.072*** 0.012*** 1.877*** Y 300 80.098 158.02***
0.043 0.056 0.054 0.019 0.001 0.444
t-value 1.85 −4.98 7.48 3.69 9.39 4.22
Coef
SCRation Std.Err
*
0.100 −0.632*** 0.914*** 0.084** 0.014*** 3.833*** Y 300 −63.929 134.94***
Note: ***, ** and * in the table indicate p < 0.01, p < 0.05 and p < 0.1, respectively. 7
0.070 0.091 0.085 0.031 0.002 0.721
t-value
Coef
1.42 −6.93 10.74 2.68 6.62 5.31
−0.092 −0.057 −0.093* 0.006 −0.013*** −0.370 Y 300 43.078 97.64*** *
Std.Err
t-value
0.047 0.063 0.060 0.022 0.001 0.497
−1.94 −0.91 −1.55 0.26 −8.76 −0.75
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enterprise OCs, and provided effective reference for improving enterprise OCs. However, our paper still has the following two limitations in the current state. At first, we pointed out that if an enterprise wants to invest in BT and achieve higher return, its rational decision is to implement BT at an appropriate time. Moreover, the results proved that the expansion of the enterprise asset scale is a significant driving factor for implementing BT. However, the implementation of BT is one of the major decisions of the enterprises, which is not only affected by the development conditions and stages of the enterprises, but also affected by other important factors such as the nature of manager, human capital structure and the external policy system, etc (Besharov & Smith, 2014; Song, Pan, Pan, & Jiao, 2018). Hence, the following-up research should focus on further mining the pre-adjustment of the implementation of BT, and thus providing effective reference for the formulation of enterprise’s strategic guidelines. Secondly, we pointed out that BT not only introduces the trust mechanism and reduces the trust cost of online transactions, but also rebuilds the incentive mechanism to improve the organizational synergy efficiency. Moreover, it is an integrating function with the primary responsibility for linking business function into a cohesive and high-performing business model, and it has an important impact on improving enterprise OCs. A good cooperation atmosphere and timely communication will be important factors to further develop the impact of BT and enhance the enterprise OCs (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017; Wu, Ding, & Chen, 2012). Hence, deeply digging the impact of collaboration on enterprise OCs, discussing the advantage of information sharing and resources exchanging are helpful to formulate a better operational mode and improve BT implementation measures.
supporting the smooth implementation of BT (Bottazzi et al., 2001). In addition, note that realizing enterprise intelligent operation plays an important role in improving the core competitiveness of enterprises (Jantunen et al., 2018). In this paper, we pointed that applying BT to the enterprise internal operation and external cooperation can provide emerging solutions to a series of practical problems (Nakasumi, 2017; Perboli et al., 2018). BT is a distributed database built on the principle of cryptography. From an application perspective, it is a trusted, shareable public ledger. BT has the ability to convey value and solve the crisis of trust (Caro et al., 2018). 5.3. Managerial contribution Our findings also provide some essential managerial implications. At first, knowledge and information sharing is the main factor affects the enterprise long-term stable development. The competitiveness of an organization primarily depends on its ability to mine new knowledge, promote the innovation and dissemination of knowledge, and realize value-added knowledge. However, as demanders and providers of knowledge, organizational members have bidirectional and dynamic characteristics, which lead to inefficient knowledge sharing. Therefore, enterprise managers should focus on introducing trust mechanisms to solve the problem of trust among organizations, such as the nodes with interest conflicts or competing relationship. Secondly, mastering the core technology resources of the BT is the key to successful enterprise development in the BT era. Enterprises should start the top-level design of BT as soon as possible, ensure the investment of special funds, promote the formation of specialized research teams, and guide universities and enterprises to increase research and development efforts. Moreover, managers should take advantage of informationization and optimize enterprise’s resources to form a smooth enterprise information flow, logistics and workflow, thereby improving the enterprise’s operation management level and enhancing the enterprise’s core competitiveness and operational efficiency. Finally, industry cooperation, based on BT, is a basic method of exploring the rapid and efficient integration of capital, technology and commercial resources. The development of a unified and complete trusted industry standard is an inherent requirement for the development of corporation based on BT. Enterprises should be compatible with more advanced business concepts, pay more attention to the improvement of the enterprise's own professionalism, and provide more professional and intelligent enterprise services relying on BT.
Disclosure of interest statement No potential conflict of interest was reported by the authors. Acknowledgements The authors thank anonymous referees and editors for their very constructive comments on the initial draft of the article. This work was supported by the Major Projects in Philosophy and Social Science Research from the Ministry of Education of China (Grant No. 14JZD031); the National Natural Science Foundation of China (Grant Nos. 71303029, 71471001, 71473203, 41771568, 71533004, 71503001, 71804001); the National Social Science Foundation Project (17BGL266); the National Key Research and Development Program of China (Grant No. 2016YFA0602500); the Liaoning Provincial Economic and Social Development Project (2019lslktyb-011), The Fundamental Research Funds for the Central Universities (DUT18RW210). Dalian Youth Science and Technology Star Cultivation Project (2016RQ004).
6. Conclusions As a new technology with broad prospects, BT can automatically build a trust system, implement value exchange and continuously promote the improvement of enterprise OCs. Our paper revealed that existing research has only focused on the business process modelling and technology design process of a blockchain-based solution and neglected analysis of the relationship between them based on actual data. Hence, we pointed out that the implementation of BT effectively builds the internal trust relationship and enhances the collaboration among supply chain members, which in turn has a significant positive effect on the improvement of the enterprise OCs. On this basis, we collected 50 BT listed enterprises in China and quantitatively analysed the impact of the implementation of BT on enterprise OCs. Our results revealed that the expansion of the enterprise asset scale is a significant driving factor for implementing BT. In addition, out paper proved that implementation of BT has a positive impact on improving asset turnover rate and reducing sales expense rate, which significantly promotes the improvement of enterprise OCs. Compared with previous studies, we elaborated on the impact mechanism of BT on enterprise OCs. At the same time, based on the data of Chinese listed enterprises, we empirically analysed the impact of BT on
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Contents lists available at ScienceDirect
International Journal of Information Management journal homepage: www.elsevier.com/locate/ijinfomgt
Blockchain technology and enterprise operational capabilities: An empirical test ⁎
Xiongfeng Pana, Xianyou Pana, Malin Songb, , Bowei Aia, Yang Minga a b
School of Economics and Management, Dalian University of Technology, Dalian, China School of Statistics and Applied Mathematics, Anhui University of Finance and Economics, Anhui, China
A R T I C LE I N FO
A B S T R A C T
Keywords: Blockchain technology Enterprise operational capabilities Trust climate Supply chain management Business transformation
As a new type of disruptive internet technology, blockchain technology is widely used as a technical support for enterprises to improve production processes and reduce costs. This paper reveals that existing research has only focused on the business process modelling and technology design process of a blockchain-based solution and has neglected analysis of the relationship between blockchain technology and enterprise operational capabilities based on actual data. Hence, this paper collects 50 listed blockchain technology enterprises in China and quantitatively analyses them. The results show that the expansion of the enterprise asset scale is a significant driving factor for implementing blockchain technology. In addition, this paper proves that implementation of blockchain technology has a positive impact on improving asset turnover rate and reducing sales expense rate. Based on the results of theoretical and empirical analysis, this paper provides some constructive suggestions for constructing blockchain projects in the future.
1. Introduction Operational capabilities (hereafter OCs) represent organisational abilities that allow an enterprise to “make a living” (Winter, 2003) and they do this typically by realizing competitive advantage via improved processes whereby reducing firm costs (Miocevic & Morgan, 2018). Promoting the transformation of enterprises and improving their OCs are the most important tasks of global enterprises (Lu, Rong, & You, 2014; Zhang & Chen, 2018). At the same time, the rapid development of information technology provides an excellent opportunity for enterprises to improve management models and enhance OCs, thereby supporting the enterprises to provide products and services with high value-added to consumers (Akter, Wamba, & Barrett, 2018; Cotteleer & Bendoly, 2006; Karabasevic, Zavadskas, Stanujkic, Popovic, & Brzakovic, 2018). The annual World Economic Forum 2016 themed "controlling the fourth industrial revolution" was held in Switzerland in January 2016, and it also noted that information technology would bring a "new normal" to global economic growth. Blockchain technology (hereafter BT) can be defined as a distributed ledger database for verifiably and permanently recording transactions among parties (Perboli, Musso, & Rosano, 2018). It has gradually attracted attention in various fields, due to its unique consensus mechanism and compatible encryption algorithms (Hughes et al., 2019; Lu
& Xu, 2017). From the perspective of enterprises, the effective integration of internal and external information resources plays an important and positive role in improving enterprises’ OCs (Dubey, Gunasekaran, Childe, & Papadopoulos, 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017; Eltayeb, Zailani, & Ramayah, 2011; Pan, Zhang & Song, 2018). BT overcomes many problems related to information sharing and resource integration in traditional enterprise management and external collaboration, and it also spawns a new business operation and management model (Kshetri, 2018; Nakasumi, 2017). However, there are still many obstacles to the development of BT and its application. The State Council’s guidance on actively promoting “Internet Plus” notes that traditional enterprises lack the awareness and ability to use internet information technology and that there are many obstacles, such as capital and talent shortages, in the development of new formats. Moreover, although many organizations are aware of the potential of BT, few have concrete initiatives to implement this technology (Ying, Jia, & Du, 2018). Up to data, most of scholars paid their attention to the business process modelling and presented a meta-model for executing secure business transactions using BT and an enterprise operating system. Moreover, they intended to solve the security risks involved in business transactions executions to increase trust, authenticity, robustness, and traceability against fraud. In terms of specific application, they moved
⁎
Corresponding author. E-mail addresses: [email protected] (X. Pan), [email protected] (X. Pan), [email protected] (M. Song), [email protected] (B. Ai), [email protected] (Y. Ming). https://doi.org/10.1016/j.ijinfomgt.2019.05.002 Received 4 February 2019; Received in revised form 26 April 2019; Accepted 8 May 2019 0268-4012/ © 2019 Elsevier Ltd. All rights reserved.
Please cite this article as: Xiongfeng Pan, et al., International Journal of Information Management, https://doi.org/10.1016/j.ijinfomgt.2019.05.002
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the primary responsibility for linking business function into a cohesive and high-performing business model, and it has an important impact on improving enterprise OCs (Wu & Chiu, 2018). BT is used to provide technology support in external collaboration and optimization because of some intrinsic characteristics, such as data integrity and decentralized operations (Kshetri, 2018). In the following parts, we discuss the characteristics attributed to BT and the influence mechanism of BT on enterprise OCs from two perspectives, internal operation and external collaboration.
the attention of BT to various domains in past years (Caro, Ali, Vecchio, & Giaffreda, 2018; Di et al., 2018; Nakasumi, 2017; Queiroz & Wanba, 2019; Tian, 2017), such as legal areas (Gurkaynak, Yilmaz, Yesilaltay, & Bengi, 2018), energy sector (Aitzhan & Svetinovic, 2018; Kim & Huh, 2018), finance (Treleaven, Brown, & Yang, 2017) and the others (Weber, Xu, Riveret, Guido, Alexander, & Jan, 2016; Ying et al., 2018). In addition, BT represented the backbone of a new digital supply chain (Figorilli et al., 2018; Kshetri, 2018; Toyoda, Mathiopoulos, Sasase, & Ohtsuki, 2017; Yoo & Won, 2018). Because of its capability of ensuring data immutability and public accessibility of data streams, BT increases the efficiency, reliability, and transparency of supply chain management (Wamba, Angappa, Papadopoulos, & Eric, 2018; Wamba, Kamdjoug, Bawack, & Keogh, 2018). Moreover, BT is already transforming and remodelling the relationships between all members of logistics and supply chain systems (Queiroz & Wanba, 2019). Through the above literature reviews, we observed that the existing literature has primarily considered the business process modelling and technology design processes of a BT-based solution. However, the research results have often verified the implementation effect of BT, based on the simulation methods. In particular, there is limited evidence of the value of the BT and the overall costs and benefits, preventing the development of real cases. The consequence is, as highlighted in the report of Trujillo, Fromhart, and Srinivas (2018), there are few BT projects with high longevity. Only 8% of projects are actively maintained, while the others fail. Our primary aim of this study was hence to discover the impact of BT on the enterprise OCs. Consequently, our overarching research question was: ‘How will BT affects enterprise OCs?’ Through the internal operation and external collaboration, we tried to analyze how BT will affect enterprise OCs from these two aspects. Through this enquiry, we expected to gain insights into the following sub-questions:
2.1. BT characteristics From a system design standpoint, the key characteristics of the BT are listed as follows (Perboli et al., 2018; Treiblmaier, 2018). 2.1.1. Open distributed ledger The BT is designed to be decentralized. Thus, the database is distributed, and copies of all information are shared among the participants. They can validate this information without a centralized authority. The decentralization, combined with the real-time updating of information, makes BT useful in networks involving different organizations. 2.1.2. Few intermediary third parties A traditional business transaction involves two parts: a public ledger entry about the transaction and private messages between the parties involving identities, security keys for transactions and location. The combination of these two parts and the decentralization of the system (accessible to anyone who validates) make it possible to avoid an intermediary third party, and execute a transaction with limited cost and time in a secure manner.
RQ1. What are BT’s perceived benefits to enterprise internal operations?
2.1.3. Consensus-based and trustiness The participants independently validate a transaction. Due to the decentralized storage and the presence of more than one copy of the database, the participants must agree on the source of the truth to verify the transaction. The consensus mechanism helps to avoid mistakes or fraudulent actions that could affect the database.
RQ2. How does BT could impact on enterprise external collaboration? RO3. Based on question (1) and (2), is BT really beneficial to the improvement of enterprise OCs in reality? Compared with the existing literature, this paper contributes to the literature in two areas. First, we integrated the other contributions and propose a standard model to explore the influence mechanism of BT on enterprise OCs. In particular, from the two aspects of internal operation and external collaboration, we deeply analyzed the influence mechanism of BT on enterprise OCs; Second, we collected relevant information from BT listed enterprises and quantitatively verified the impact of implementing BT on enterprise OCs. Contrary to contributions based on simulations technology of the past researches, an essential aspect of the novelty of this paper was that our analysis refers to various enterprises that have actually implemented BT. The remainder of this paper is organized in the following manner. In Section 2, we explore how BT impacts enterprise OCs. In Section 3, we provide an overview of model setting and data description. Section 4 presents and analyses the empirical results. Section 5 concludes the paper with the implications of our research, limitations of the study and directions for future research.
2.1.4. Cryptographically sealed and immutability of data One of the most important pillars of BT is cryptography. In fact, once the transaction has been validated and recorded, cryptographic technologies are needed for the digital signatures and data integrity, avoiding the manipulation of a block. 2.1.5. Rules to share data Participants govern the BT. In advance, they agreed on the types of transaction, which are stored in the chain as smart contracts. 2.2. BT and enterprise OCs——from the perspective of internal operation With the increasingly fierce market competition, the uncertainty and complexity of the enterprise’s living environment are becoming more and more significant (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017). Agency theory emphasizes that formal control and supervision facilitates business operations management (Jensen & Meckling, 1976). However, scholars note that these formal controls have many shortcomings in explaining and predicting managerial behaviour (Davis, Schoorman, & Donaldson, 1997). They emphasize the role of informal factors, such as commitment and trust in internal corporate governance. Moreover, Hosmer (1995) highlights that the principle of maintaining commitment within the enterprise is maintaining honesty, rather than using the weaknesses of the other part to obtain benefits. Sheng (2019) focuses on three organizational practices, namely, entrepreneurial competence, relationship harmony, and information communication technology
2. Theoretical background Knowledge and information sharing are important to achieve effective cooperation among different organizations and departments (Cao, Duan, & Cadden, 2019; Fiorini & Jabbour, 2017; Liu, Felix, Yang, & Niu, 2018; Zhu, Peng, & Zhang, 2018). Within an enterprise, BT not only introduces the trust mechanism and reduces the cost of online transactions, but also rebuilds the incentive mechanism to improve the organizational synergy efficiency (Funk, Riddell, Ankel, & Cabrera, 2018). Moreover, external collaboration is an integrating function with 2
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Fig. 1. Inter-enterprise value link based on BT.
mostly for the liquidation of financial assets, the use of smart contracts, etc; Blockchain 3.0 is an extension based on 2.0, with a particular emphasis on extending the BT into more aspects of social life. From the view of specific application, in the financial services field, the BT continues to deepen in payment, transaction clearing, trade finance, digital currency, equity and risk control (Treleaven et al., 2017). In the field of social management, the BT promotes proxy voting, identity authentication, and personal social credit (Figorilli et al., 2018). In the aspect of Internet of Things, the BT continues to focus on product information traceability, network security, and contracts (FernandezCarames & Fraga-Lamas, 2018). Supply chain is a complex functional network consisting of suppliers, manufacturers, distributors, retailers, consumers, logistics, and other related companies from raw materials to final products (Balasubramanian & Shukla, 2018; Mohamed, Egilmez, Kucukvar, & Bhutta, 2017). It is proposed that the supply chains will collaborate with one another through trust foundations, connect individual enterprises and build a composite network, ultimately optimizing the overall efficiency and bringing greater benefits to related enterprises on the chain (Chi, Wang, Lu, & George, 2018; Namagembe, Ryan, & Sridharan, 2018; Woo, Kim, & Chung, 2016). In particular, effective supply chain management measures promote information sharing within the supply chain and have a positive impact on improving the OCs of enterprises; Moreover, the diversity of customer needs puts higher demands on supply chain agility. Effective supply chain management promotes the acquisition of external customer knowledge and better adapt to the external environment, thereby improving its OCs. Therefore, supply chain management is a strategic orientation of the enterprise, and it involves various aspects such as internal enterprises, customers and suppliers. If the enterprises can properly handle these integration relationships, it can enhance the OCs of the enterprises and profit from it. However, the information island phenomenon is prevalent in the current supply chain operation (Dominguez, Cannella, Barbosa-Povoa, & Framinan, 2018). In particular, information is discretely distributed among different enterprises in the supply chain, with low degree of sharing, slow operation and poor information authenticity and reliability. With the development of BT, establishing a supply chain information platform with BT as the core can effectively link supply chain alliances, financial institutions and government regulatory departments, and promote the integration of business flow, logistics, capital flow and information flow in the supply chain (Kamble, Gunasekaran, & Arha, 2019; Queiroz & Wanba, 2019; Wang, Han, & Davie, 2019; Wang, Singgih, Wang , & Rit, 2019). As shown in Fig. 2, the BT platform for supply chain management is built on top of various core technologies, such as hardware, network, data, consensus, and incentive layers. Some platform systems can be implemented based on modules, such as monitoring systems, upgrade systems, node management systems,
competence, which are potential enhancements to enterprise’s capability. In addition, trust can be an effective complement to the formal internal organization mechanism and play a flexible and effective role in the corporate governance (Dyer & Chu, 2003). A good atmosphere of trust within the enterprise helps organizations and individuals to avoid economic benefits loss through knowledge sharing (Chai & Kim, 2010). At the organization and team level, knowledge sharing means passing, acquiring, organizing and storing knowledge so that they can be used effectively. For the individual, knowledge sharing means communication and learning between colleagues, which makes them complete work or solve problems more effectively (Nelson & Cooprider, 1996). As shown in the Fig. 1, first, the BT combines the data structure in the form of chains in chronological order, which effectively integrates information, prevents information from being falsified, and ensures the security and reliability of data. Secondly, the development of BT is based on information encryption technology and the application of related platforms. Blockchain participants ensure the information and trust security of each node through computer cryptography algorithm, which effectively ensures the information communication and sharing between departments. Therefore, the building of trust mechanism based on BT is helpful to form a trust atmosphere within the enterprise, improve the enterprise's internal knowledge stock and flow levels, shape core competitiveness and enhance the enterprise OCs (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017). Moreover, the consensus mechanism of BT ensures the fairness among the various departments within an enterprise. Specifically, the BT establishes the synergy relationship of the entire process nodes and constructs the participation rules and incentive mechanisms (Fernandez-Carames & Fraga-Lamas, 2018). At the same time, BT realizes the circulation of assets, and it transforms talent and creativity into digital assets. Eventually, the creative contribution history of each person can be objectively recorded in the form of digital assets, and the checkout incentives can be automatically confirmed (He et al., 2018). In addition, relying on the BT consensus mechanism and related technologies, such as big data and artificial intelligence, enterprises can handle complex data and information effortlessly, adjust internal business rules and develop effective operational processes (Dinh et al., 2018; Wamba, Angappa et al., 2018; Wamba, Kamdjoug et al., 2018).
2.3. BT and enterprise OCs——from the perspective of external collaboration BT applications have evolved from the blockchain 1.0 era to the blockchain 3.0 era. Among them, blockchain 1.0 era refers to the application of BT in virtual digital currency market such as currency transfer and payment system; Blockchain 2.0 refers to the application of BT in financial markets such as securities, futures, loans and bills, and 3
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Fig. 2. Enterprise external cooperation based on block-chain technology.
equipment, Internet and so on) and 18 regions (Beijing, Shengzhen, Zhengjiang and so on). And then, we collected their annual financial data from 2012 to 2017 from the Reset database. In order to ensure the validity of the data, we excluded the listed companies with short timeto-market (or just major asset restructuring) and the companies with missing data. Moreover, the key financial indicators of the enterprise (such as total assets, fixed assets, and current liabilities) could not be missing, otherwise it was deleted. Finally, 50 sample data that met the requirements were obtained.
contract management systems, and so on. Based on the platform module and system, the BT implements the specific services required in the actual scenario of supply chain management, such as providing operational services, reporting services, data management and analysis in data services. In addition, the BT provides specific business content, such as purchasing services, financial services and risk control services in supply chain management. By building a BT-based supply chain management platform, enterprises can capture massive amounts of data and record commodity circulation information based on source tracking, certificate storage, mutual trust, and information communication so as to effectively meet the supply chain requirements (Nakasumi, 2017). Moreover, connecting supply chain-related companies and promoting the integration of commodity flows, logistics, capital flows and information flows can reduce operating costs and improve operating quality (Aydiner, Tatoglu, Bayraktar, and Zaim (2019); Khouri, Rosova, Straka, & Behun, 2018; Perboli et al., 2018).
3.2. Model construction First, the application of BT has a distinct "scale economy" feature. Specifically, with the expansion of enterprise scale, the business related to the BT can exert greater advantages in analysing the enterprise’s economic behaviour, mining the law of corporate behaviour, and improving the enterprise’s operational efficiency (Bottazzi, Dosi, Lippi, Pammolli, & Riccaboni, 2001). At the same time, the diversified and complex business environment makes the traditional centralized supply chain management model unsustainable (Wamba, Angappa et al., 2018; Wamba, Kamdjoug et al., 2018). Therefore, we examined the basic motivations of enterprises to implement BT-related business from the perspectives of enterprise asset size, staff size and sales scale. In order to analyze the above problems, we first grouped the enterprise samples and constructed a logistic regression model. The dependent variable here is – whether to implement the BT, that is, "yes" or "no", which is a categorical variable. Secondly, the explanatory variables mainly include the total asset size, sales revenue scale and employee size. Moreover, due to the uneven annual distribution of the BT enterprise sample, the Year dummy variable was used as a control variable to control the influence of other external factors. The model was built as follows:
3. Data description and model construction 3.1. Sample selection Due to the lack of suitable business news database in China, according to the research of Zheng, Wu, and Kahn (2012), we directly used the Baidu search engine to manually search for the related reports on the implementation of BT by Chinese A-share listed enterprises. The reason why Baidu Search was chosen is that it is the largest Chinese search engine in the world and has the largest Chinese webpage library in the world. It may provide more detailed reports on the BT of Chinese enterprise. The keywords used for the search are listed enterprise abbreviation and blockchain technology. For a listed enterprise with a special abbreviation, we used its stock code or full enterprise name instead of enterprise abbreviation. All BT listed companies in China A-shares were searched one by one. As shown in Figs. 3 and 4, as of June 2018, there are 77 BT listed companies based on A-shares, which are distributed in 25 major industries (e.g., software services, computer
BTit = a1 Assetsit + a2 Salesit + a3 Staffit + Year + εit
Model 1.
In Model 1, BTit is a 0–1 categorical variable, which represents the 4
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Fig. 3. Regional distribution of China’s BT enterprises.
regression method.
implementation of BT of enterprise i in t year. Assetsit represents enterprise’s total asset size, Salesit represents enterprise’s sales revenue scale, Staffit represents enterprise’s employee size. In the test of the model, because the values of BTit are equal to 0 (left-censored) or 1 (right-censored), the Tobit regression method was used in the empirical analysis process. It was proposed by Tobin (1958) and describes the association between non-negative dependent variables (latent variables) and independent variables when the data are censored or truncated. Second, we further verified the impact of implementing BT on enterprise OCs. The concrete form of the empirical analysis model is as follows:
3.3. Variable selection and description 3.3.1. Operational capabilities Operation management plays a vital role in the enterprises’ daily operations, and it reflects the effectiveness of business operations and the dynamic responsiveness (Jantunen, Tarkiainen, Chari, & Oghazi, 2018). The primary objectives of enterprise operation management are to reduce production, manufacturing and transport cost, increase profit margins, and produce high-quality products at the lowest operating cost (Prajogo, Toy, Bhattacharya, Oke, & Cheng, 2018). Hence, in this paper, we primarily used three kinds of indicators to measure enterprise OCs, including enterprise total asset turnover rate (ATurnover), enterprise current assets turnover rate (ETurnover) and enterprise sales expense ratio (SCRation). Among them, the ATurnover is measured by the ratio of the net sales income of the enterprise to the average total assets in a certain period. ETurnover is the ratio of the net income of the main business to the average total current assets in a certain period, and SCRation is the ratio of sales expenses to operating income of the enterprise.
OCsit = β1 BTit + γ1 Leverageit + γ2 Salesit + γ3 Assetsit + γ4 Staffit + εit
Model 2.
In Model 2, OCsit reflects the OCs of enterprise i in t year. BTit, the core explanatory variable in the model, reflects the implementation of BT. β1, the regression parameter to be estimated, reflects the impact of implementing BT on enterprise OCs. At the same time, considering the availability and comparability of financial index of listed companies, we used the financial leverage ratio (Leverage), the average employee sales revenue (Sales), total asset size (Asset), total staff size (Staff) and the Year dummy variable as the control variables. εit is normally, identically and independently distributed error term. In the test of the model, we used the linear ordinary least squares method as the basic
3.3.2. Blockchain technology BT has been implemented in all samples, and only the implementation year is different. At the same time, from the publicity of
Fig. 4. Industry distribution of China’s BT enterprises. Note: Limited by the requirements of the layout, we only listed the top five industries. Readers who require more detailed data can contact the author. 5
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blockchain project, BT has a significant impact on enterprise OCs. Therefore, the first two years, the previous year, the current year and the following year of the implementation of the BT are the years related to the implementation, where the BTit value is 1 and the BTit value of the other years is 0.
Table 2 Test results of the determinants for implementing BT. Variable
Tobit-Model Coef
Asset Staff Sales cons Year Number of obs R-squared LR chi2(8) Log likelihood 4Root MSE F(8,291)
3.3.3. Control variables Asset and staff are the most basic units of business operations, and they play important roles in business operations. From the perspective of cost, the increasing of employee numbers and assets size affect the enterprise operating costs and the enterprise OCs. Therefore, we considered the total number of employees (Staff) and the total amount of corporate assets (Asset) as the control variables. Among them, Staff is represented by the sum number of enterprise's employee. Asset is the total amount of assets owned or controlled by the enterprise. According to the financial management theory, security, liquidity and profitability are the basic principles that must be followed in business management (Gan, Wei, Wang, & Zheng, 2018). As a ratio of equity capital to total assets in the balance sheet, Leverage measures the liability risk and operational security of one enterprise, and also reflects the enterprise's repayment ability. At the same time, Sales reflects the ability of the enterprise to obtain profits, which is usually expressed by the level of corporate income in a certain period.
Ordinary Least Square Std.Err
**
0.177 −0.070 −0.091 −0.589* Y 300 0.706 439.20*** −91.321 – –
0.096 0.063 0.093 0.378
t-value 1.85 −1.12 −0.98 −1.56
Coef **
0.110 −0.034 −0.061 −0.352* Y 300 0.782 – – 0.227 130.39***
Std.Err
t-value
0.061 0.038 0.059 0.246
1.79 −0.91 −1.04 −1.43
Note: ***, ** and * in the table indicate p < 0.01, p < 0.05 and p < 0.1, respectively.
4.3. The impact of BT implementation on enterprise OCs To test the impact of BT implementation on enterprise OCs, according to variables selection and model construction, we conducted a comprehensive test from three aspects: total asset turnover rate, current asset turnover rate and sales expense rate. We tested the specific form of the panel model using the Hausman test, and then we analysed the influence of BT implementation on enterprise OCs based on the fixed effect or the random effect model. The specific regression results are shown in Table 3. Observing Table 3, the regression coefficient of BC is positive and significant at the level of 5%, which means that the implementation of BT has a positive impact on the enterprise OCs. Using the current asset turnover rate as the main dependent variable, the regression coefficient of BC is still positive and passes the 10% significance level test. In addition, from the sales expense ratio perspective, the regression coefficient of BC is negative and significant at the 10% level, which means that the development of BT effectively reduces the sales expenses of enterprises. To test the robustness of the above conclusions, we retested the relationship between BT implementation and enterprise OCs based on maximum likelihood estimation, and listed the results in Table 4. The results prove that the conclusions obtained in this paper are robust.
4. Results 4.1. Sample test Table 1 shows the descriptive statistics, Pearson’s correlation coefficients and variance inflation factors (VIFs) of variables. None of the correlation coefficients are greater than 0.8. VIFs are between 1 and 4 and less than the recommended maximum threshold of 10 (Gujarati, 2011), and the mean of VIF is equal to 1.99. Thus, the multicollinearity between non-interacted independent variables is not a concern (Meng, Zeng, & Tam, 2013). 4.2. Test of the BT determinant Based on Model 1, we examined the determinants of BT implementation. As shown in Table 2. The regression coefficient of Asset is equal to 0.177 and passes the significant test at the 5% level, indicating that the enterprise’s total asset size has a significant positive impact on the implementation of BT. However, this positive impact is not reflected in the increasing of the enterprise employee size and the expansion of enterprise sales revenue. To test the robustness of the results, we employed the linear ordinary least squares method to testify the above results again. As shown in the right column of Table 2, the values and symbols of the regression coefficients do not significantly change, which indicates that the conclusions obtained in this section are robust.
5. Discussion 5.1. Main findings BT is a distributed ledger database for verifiably and permanently recording transactions between parties. With the advancement of research and development made by scholars, it provides a good opportunity for the improvement of enterprise OCs. However, there are still
Table 1 Descriptive statistics, Pearson’s correlation coefficients and VIFs of variables. Variable
Obs
Mean
Std.Dev.
Min
Max
SCRation
ATurnover ETurnover SCRation BT Asset Staff Leverage Sales VIFs
300 300 300 300 300 300 300 300
0.610 0.978 0.969 0.353 9.571 3.436 0.827 1.870
0.392 0.570 0.039 0.479 0.563 0.530 1.087 9.334
0.073 0.106 0.838 0.000 8.294 1.708 0.044 0.077
2.035 2.627 1.077 1.000 11.243 4.627 9.544 128.722
1.000 −0.091 −0.291 −0.126 −0.284 −0.356
BT
Asset
Staff
Leverage
Sales
1.000 0.291 0.078 0.073 0.125 1.55
1.000 0.627 0.635 0.188 3.55
1.000 0.279 −0.186 2.13
1.000 0.076 1.85
1.000 1.26
Note: Limited by the layout, only the correlation coefficient matrix and the collinearity test result of the sales expense rate are provided here. However, the results of total asset turnover rate and current asset turnover rate all meet the requirements of the correlation coefficient test and VIFs test. Readers can contact the author of this paper and request additional test results. 6
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Table 3 Impact of the implementation of BT on enterprise OCs. Variable
ATurnover Coef
BC Asset Staff Leverage Sales cons Year Number of Obs R-squared F test Hausman
ETurnover Std.Err
**
0.091 −0.307*** 0.352*** 0.081*** 0.012*** 2.317*** Y 300 0.438 22.77*** 16.32**
0.043 0.062 0.060 0.021 0.001 0.496
t-value 2.10 −4.94 5.84 3.82 8.75 4.67
SCRation
Coef
Std.Err *
0.124 −0.746*** 0.944** 0.089** 0.014*** 4.718*** Y 300 0.385 17.98*** 14.77**
0.072 0.103 0.100 0.035 0.002 0.820
t-value
Coef
1.72 −7.26 9.46 2.53 6.47 5.83
−0.092 −0.057 −0.093* 0.005 −0.013*** −0.367 Y 300 0.301 – 6.17 **
Std.Err
t-value
0.048 0.064 0.061 0.022 0.001 0.505
−1.91 −0.90 −1.52 0.24 −8.58 −0.73
Note: ***, ** and * in the table indicate p < 0.01, p < 0.05 and p < 0.1, respectively.
standard model to explore the influence mechanism of BT on enterprise OCs. In particular, from the two aspects of internal operation and external supply chain management, we deeply analyzed the influence mechanism of BT on enterprise OCs. We suggested that the implementation of BT effectively solves the problem of information asymmetry among internal departments and rebuilds a unique credit mechanism based on technology trust. At the same time, the unique consensus mechanism of the BT can quickly build a member incentive mechanism in a system with decentralized decision-making power, ensuring that all departments within the enterprise can effectively reach a consensus on the target. On the other hand, BT is a kind of decentralized high-trust distributed database technology, which has the characteristics of traceability and information resistant to tampering. Thus, establishing a supply chain management platform based on BT can connect the supply chain alliance effectively, build a trusting supply chain ecosystem, and improve OCs of supply chain member. Secondly, note that past studies have primarily considered the business process modelling and technology design process of a BT based solution, and they lack the test of implementation effect of BT. In particular, there is limited evidence on the value for the actors, as well as the overall costs and benefits, preventing the development of real cases. Thus, we collected sample data from 50 BT-listed companies and explored the prerequisites for implementing BT in enterprise. Then, we quantitatively verified the impact of the implementation of BT on the enterprise OCs. We pointed out that if an enterprise wants to invest in BT and achieve higher return, its rational decision is to implement BT in an appropriate chance (Gunasekaran, Subramanian, & Papadppoulos, 2017). When the enterprise was in a period of rapid growth, the expansion of business scale promoted managers to implement BT, so that the enterprise can establish closer contact with partners. At the same time, enterprises with rapid growth rate usually have better cash flow, which is conducive to overcoming the "organizational inertia" and
many obstacles to the development of BT and its application. Our primary aim in this study was hence to discover the impact of BT on the enterprise OCs. We proposed that BT not only introduces the trust mechanism and reduces the cost of online transactions within an enterprise, but also rebuilds the incentive mechanism to improve the organizational synergy efficiency. On the other hand, we suggested that BT was helpful to provide technology support in supply chain management and optimization because of some intrinsic characteristics, such as data integrity and decentralized operations, and it has a significant impact on enterprise OCs. In order to confirm the theoretical inference mentioned above, we collected 50 block-chain technology listed enterprises in China and quantitatively analysed the impact of the implementation of BT on enterprise OCs. The results show that the enterprise’s total asset scale is the most important factor in implementing BT. In particular, for the same type of enterprises, enterprises with larger scale are more inclined to adopt BT. Moreover, we measured the enterprise OCs from three aspects: the total asset turnover rate, current assets turnover rate and sales expense rate. The empirical results indicate that the implementation of BT has indeed led to positive impacts on the improvement of enterprise OCs. 5.2. Theoretical contribution As a new technology with broad prospects, BT can automatically build a trust system, implement value exchange and continuously promote the improvement of enterprise OCs. For enterprises, it is helpful to overcome obstacles related to information sharing and resource integration in traditional enterprise operational management (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017; Pan et al., 2018). This study contributes to the extant literature in two ways. Firstly, we integrated the other contributions and proposed a Table 4 Robustness test of the effect of BT on enterprise OCs. Variable
ATurnover Coef
BC Asset Staff Leverage Sales cons Year Number of Obs Log likelihood LR chi2(10)
ETurnover Std.Err
**
0.078 −0.276*** 0.401*** 0.072*** 0.012*** 1.877*** Y 300 80.098 158.02***
0.043 0.056 0.054 0.019 0.001 0.444
t-value 1.85 −4.98 7.48 3.69 9.39 4.22
Coef
SCRation Std.Err
*
0.100 −0.632*** 0.914*** 0.084** 0.014*** 3.833*** Y 300 −63.929 134.94***
Note: ***, ** and * in the table indicate p < 0.01, p < 0.05 and p < 0.1, respectively. 7
0.070 0.091 0.085 0.031 0.002 0.721
t-value
Coef
1.42 −6.93 10.74 2.68 6.62 5.31
−0.092 −0.057 −0.093* 0.006 −0.013*** −0.370 Y 300 43.078 97.64*** *
Std.Err
t-value
0.047 0.063 0.060 0.022 0.001 0.497
−1.94 −0.91 −1.55 0.26 −8.76 −0.75
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enterprise OCs, and provided effective reference for improving enterprise OCs. However, our paper still has the following two limitations in the current state. At first, we pointed out that if an enterprise wants to invest in BT and achieve higher return, its rational decision is to implement BT at an appropriate time. Moreover, the results proved that the expansion of the enterprise asset scale is a significant driving factor for implementing BT. However, the implementation of BT is one of the major decisions of the enterprises, which is not only affected by the development conditions and stages of the enterprises, but also affected by other important factors such as the nature of manager, human capital structure and the external policy system, etc (Besharov & Smith, 2014; Song, Pan, Pan, & Jiao, 2018). Hence, the following-up research should focus on further mining the pre-adjustment of the implementation of BT, and thus providing effective reference for the formulation of enterprise’s strategic guidelines. Secondly, we pointed out that BT not only introduces the trust mechanism and reduces the trust cost of online transactions, but also rebuilds the incentive mechanism to improve the organizational synergy efficiency. Moreover, it is an integrating function with the primary responsibility for linking business function into a cohesive and high-performing business model, and it has an important impact on improving enterprise OCs. A good cooperation atmosphere and timely communication will be important factors to further develop the impact of BT and enhance the enterprise OCs (Dubey, Gunasekaran, Childe et al., 2017; Dubey, Gunasekaran, Papadopoulos et al., 2017; Wu, Ding, & Chen, 2012). Hence, deeply digging the impact of collaboration on enterprise OCs, discussing the advantage of information sharing and resources exchanging are helpful to formulate a better operational mode and improve BT implementation measures.
supporting the smooth implementation of BT (Bottazzi et al., 2001). In addition, note that realizing enterprise intelligent operation plays an important role in improving the core competitiveness of enterprises (Jantunen et al., 2018). In this paper, we pointed that applying BT to the enterprise internal operation and external cooperation can provide emerging solutions to a series of practical problems (Nakasumi, 2017; Perboli et al., 2018). BT is a distributed database built on the principle of cryptography. From an application perspective, it is a trusted, shareable public ledger. BT has the ability to convey value and solve the crisis of trust (Caro et al., 2018). 5.3. Managerial contribution Our findings also provide some essential managerial implications. At first, knowledge and information sharing is the main factor affects the enterprise long-term stable development. The competitiveness of an organization primarily depends on its ability to mine new knowledge, promote the innovation and dissemination of knowledge, and realize value-added knowledge. However, as demanders and providers of knowledge, organizational members have bidirectional and dynamic characteristics, which lead to inefficient knowledge sharing. Therefore, enterprise managers should focus on introducing trust mechanisms to solve the problem of trust among organizations, such as the nodes with interest conflicts or competing relationship. Secondly, mastering the core technology resources of the BT is the key to successful enterprise development in the BT era. Enterprises should start the top-level design of BT as soon as possible, ensure the investment of special funds, promote the formation of specialized research teams, and guide universities and enterprises to increase research and development efforts. Moreover, managers should take advantage of informationization and optimize enterprise’s resources to form a smooth enterprise information flow, logistics and workflow, thereby improving the enterprise’s operation management level and enhancing the enterprise’s core competitiveness and operational efficiency. Finally, industry cooperation, based on BT, is a basic method of exploring the rapid and efficient integration of capital, technology and commercial resources. The development of a unified and complete trusted industry standard is an inherent requirement for the development of corporation based on BT. Enterprises should be compatible with more advanced business concepts, pay more attention to the improvement of the enterprise's own professionalism, and provide more professional and intelligent enterprise services relying on BT.
Disclosure of interest statement No potential conflict of interest was reported by the authors. Acknowledgements The authors thank anonymous referees and editors for their very constructive comments on the initial draft of the article. This work was supported by the Major Projects in Philosophy and Social Science Research from the Ministry of Education of China (Grant No. 14JZD031); the National Natural Science Foundation of China (Grant Nos. 71303029, 71471001, 71473203, 41771568, 71533004, 71503001, 71804001); the National Social Science Foundation Project (17BGL266); the National Key Research and Development Program of China (Grant No. 2016YFA0602500); the Liaoning Provincial Economic and Social Development Project (2019lslktyb-011), The Fundamental Research Funds for the Central Universities (DUT18RW210). Dalian Youth Science and Technology Star Cultivation Project (2016RQ004).
6. Conclusions As a new technology with broad prospects, BT can automatically build a trust system, implement value exchange and continuously promote the improvement of enterprise OCs. Our paper revealed that existing research has only focused on the business process modelling and technology design process of a blockchain-based solution and neglected analysis of the relationship between them based on actual data. Hence, we pointed out that the implementation of BT effectively builds the internal trust relationship and enhances the collaboration among supply chain members, which in turn has a significant positive effect on the improvement of the enterprise OCs. On this basis, we collected 50 BT listed enterprises in China and quantitatively analysed the impact of the implementation of BT on enterprise OCs. Our results revealed that the expansion of the enterprise asset scale is a significant driving factor for implementing BT. In addition, out paper proved that implementation of BT has a positive impact on improving asset turnover rate and reducing sales expense rate, which significantly promotes the improvement of enterprise OCs. Compared with previous studies, we elaborated on the impact mechanism of BT on enterprise OCs. At the same time, based on the data of Chinese listed enterprises, we empirically analysed the impact of BT on
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