Blockchain innovation and firm's financial performance: patent analysis based on firm-level information

This research makes an initial attempt to analyse the effects of blockchain patents on a firm's financial performance. Blockchain technology has received increased attention since bitcoin prices skyrocketed in 2016, and applications for blockchain patents rapidly increased thereafter. Prior studies have documented that blockchain innovation could add economic value to firms, but without robust empirical analyses. Therefore, this study provides the first empirical approach to determine the effect of blockchain patents on a firm's financial performance. We find that a firm's blockchain patents are positively associated with firm value and firm performance. Moreover, the association between a firm's blockchain patents and firm value or performance is more pronounced in markets with higher competition. This study provides theoretical and practical implications. The empirical results of this study lend credence to the argument that blockchain patent contributes to real value creation. We also add to blockchain literature and extend the literature discussing environmental uncertainty. Moreover, this study suggests useful insights for firms that consider developing blockchain patents and implies the signalling effect of blockchain patent in the capital market.