The adoption of blockchain and financing constraints: Evidence from China

Despite the recognized significance of blockchain in supply chain management literature, there has been a scarcity of studies empirically exploring the link between blockchain adoption and financing constraints. This paper delves into how blockchain adoption influences financing constraints, considering the moderating effects of environmental and firm-specific factors. Utilizing panel data from A-share listed firms in China over the period 2016-2021, our analysis reveals that blockchain adoption notably eases financing constraints. Additionally, we observe a spillover effect: the adoption of blockchain technology by a central enterprise can alleviate financing constraints for affiliated companies within their supply chain, including upstream and downstream firms. Our heterogeneity analysis indicates that the effectiveness of blockchain in reducing financing constraints is more pronounced in environments with robust internal and external governance and higher levels of marketization. Moreover, blockchain adoption can mitigate traditional finance's ownership bias against non-state-owned enterprises and the bargaining power disparities faced by central firms in the supply chain. In addition, in non-high-tech, non-heavy pollution, and non-manufacturing industries, firms can better alleviate financing constraints after adopting blockchain. These findings offer valuable insights for businesses looking to navigate the challenges and opportunities of mitigating financing constraints through blockchain adoption.