ABSTRACT Despite the growing interest in blockchain (BC) technology, recent research shows mixed perceptions due to its risks and returns. We utilize event study methodology to examine overall market reactions and to delineate how specific contexts associated with BC technology influence the market reactions. Using 149 BC technology adoptions announced between January 2015 and December 2019, we find positive abnormal returns, reflecting investors’ optimistic perception toward BC technology adoption. Specifically, we find that abnormal returns from BC technology are higher when used in a transformative strategic role and offered by leading vendors, suggesting that investors view this adoption as a value-enhancing activity. Our results are robust to the use of an alternative sample and different methods of measuring variables. Overall, our study provides insights for academics and practitioners to better understand the market value of BC technology adoptions. Data Availability: Data are available from the public sources cited in the text.
Inefficient practices in the logistics industry cause huge losses in social resources. Addressing the quality control issues is challenging in multi-stage transport. Due to the structural characteristics of the serial logistics service chains, the real delivery quality of each Third Party Logistics (3PL) is invisible to the Lead Logistics Provider (LLP), and the defects of a single 3PL’s delivery quality will be covered up. Thus, unobservable delivery quality triggers the moral hazard action of 3PL, and strengthens the inequities in a serial logistics service chain. Blockchain technology can be an effective tool to resolve the moral hazard problem. We employ game theory-based models to investigate the blockchain adoption issue in serial logistics service chains. Adopting blockchain technology might bring Pareto improvement in delivery quality and total profit of the service chain. However, 3PL’s profit may be hurt because of blockchain adoption. Therefore, successful blockchain implementation depends on whether the initiator of a blockchain programme can properly incentivise 3PLs.
The emerging blockchain technology is believed to be a disruptive innovation in the fields of both supply chain management and financial management. Yet, little is known on the interaction of the two domains. In this paper, we conducted a thematic literature review in the novel field of blockchain and supply chain finance (SCF), which is based on 52 papers published from 2017 to 2021 in academic journals, proceedings and books. Based on thematic analysis, the current status of this field is concluded and presented in this research, including the challenges in traditional SCF, factors influencing blockchain adoption in SCF, blockchain-based SCF solutions, and the blockchain adoption mechanism and system design in SCF. Furthermore, a conceptual framework of blockchain adoption in SCF is developed, which combines the emerged themes. Finally, three future research directions are proposed for further research, including cost optimization of blockchain adoption in SCF, risk management of blockchain operations in SCF, and blockchain and sustainable SCF. This research presents a timely and useful summary on existing research and points out the future research directions on blockchain and SCF.
Supply chain traceability refers to product tracking from the source to customers, demanding transparency, authenticity, and high efficiency. In recent years, blockchain has been widely adopted in supply chain traceability to provide transparency and authenticity, while the efficiency issue is understudied. In practice, as the numerous product records accumulate, the time- and storage- efficiencies will decrease remarkably. To the best of our knowledge, this paper is the first work studying the efficiency issue in blockchain-based supply chain traceability. Compared to the traditional method, which searches the records stored in a single chunk sequentially, we replicate the records in multiple chunks and employ parallel search to boost the time efficiency. However, allocating the record searching primitives to the chunks with maximized parallelization ratio is challenging. To this end, we model the records and chunks as a bipartite graph and solve the allocation problem using a maximum matching algorithm. The experimental results indicate that the time overhead can be reduced by up to 85.1% with affordable storage overhead.
Applying blockchain to supply chain financing is an effective way to solve the problems of financing difficulties, high financing costs, and slow financing for small and medium-sized enterprises (SMZEs). Using evolutionary game theory, this study constructs a tripartite game model and analyzes the influence of blockchain technology on the evolutionary stability strategies for financial institutions (FIs), core enterprises (CEs), and SMZEs, in which the default losses of CEs and SMZEs are assumed to be dynamic. The results of this study are as follows: (1) When CEs and SMZESs’ default losses are lower than some critical value, they tend to break their promises. (2) When accounts receivable are greater than some critical value, CEs cannot repay on time because they can make a relatively large profits from delayed repayment, whereas SMZEs can be constrained to be trustworthy. Finally, the results using numerical simulation show that both relatively large default losses and enough large, trustworthy income sources can make CEs and SMZEs tend to keep their promises; in turn, CEs would be non-paying and the SMZEs tend to be trustworthy for relatively large accounts receivable. The results provide theoretical support for realizing healthy and sustainable development for supply chain finance.
Blockchain technology that came with the introduction of Bitcoin offers many powerful use-cases while promising the establishment of distributed autonomous organizations (DAOs) that may transform our current understanding of client-server interactions on the cyberspace. They employ distributed consensus mechanisms that were subject to a lot of research in recent years. While most of such research focused on security and performance of consensus protocols, less attention was given to their incentive mechanisms which relate to a critical feature of blockchains. Unfortunately, while blockchains are advocating decentralized operations, they are not egalitarian due to existing incentive mechanisms. Many current consensus protocols inadvertently incentivize centralization of mining power and inequitable participation. This paper explores and evaluates alternative incentive mechanisms for a more decentralized and equitable participation. We first evaluate inequality in existing Proof of Stake (PoS) based incentive mechanisms, then we examine three alternatives in which rewards scheme is more partial to low-stakeholders. Through simulation, we show that two of our alternative mechanisms can reduce inequality and offer an attractive solution for sustainability of blockchain-based applications and DAOs.
Blockchain ledgers are being increasingly used in Internet of Things (IoT) and Internet of Vehicles (IoV) applications. However, Proof of Work consensus is unsuitable in an IoV setting, which is why other paradigms need to be investigated. In this work we integrate Proof of Stake (PoS) consensus technique with multiple entry Practical Byzantine Fault Tolerance voting in a permissioned blockchain network. We introduce several PoS classes based on combination of initial stake and truthfulness of voting. We also describe a differentiated medium access approach similar to Enhanced Distribution Function (EDCA). Using a Semi Markov Process-based model, we derive the probability of reaching consensus and highlight the impact of the populations of individual stake/priority classes on achieving consensus. Our results show the impact of numbers of nodes from classes with different voting behavior on consensus probability. Results also show differentiation through the number of blocks linked per second, success probability in leadership application and delay in leader selection for node belonging to certain class. These values show how much revenue a node from given class can collect from its clients depending on initial stake and voting behavior.
The development of blockchain-driven supply chain finance aimed to solve the financing problems of SMEs. However, credit risk is expanded, and even transmitted to the whole supply chain, due to their connection, so that it becomes more difficult to effectively identify the credit risk of SMEs. The purpose of this paper was to examine the factors affecting SMEs’ credit risk in the mode of block-chain-driven supply chain finance. This research proposed an entropy weight method to construct independent variables and used logistic regression to examine whether the financing enterprises, core enterprises, assets position under financing, blockchain platform, and supply chain operation have significant impacts on credit risk. The panel data, originating from CSMAR on fifty-six quoted SMEs, included eight core enterprises and twenty-six blockchain enterprises, between 2016 and 2020. The results showed that the financing enterprises, core enterprises, asset position under fi-nance, blockchain platform, and supply chain operation have significant impacts on SMEs’ credit risk when the confidence level is 90%. The financial status of financing enterprises can reflect the credit status of SMEs. Core enterprises give credit guarantees to SMEs, and the business transactions between SMEs and core enterprises affect the credit risk through the asset position under financing. Meanwhile, blockchain platforms can solve the problem of the information asymmetry of the par-ticipating enterprises in supply chain operations. At the same time, the supply chain operation is also an important factor affecting the credit risk. This conclusion provides a reference for the ap-plication of blockchains in supply chains, to reduce the credit risk. At the same time, the selected indicators were more comprehensive, which provided a strong basis for the subsequent construc-tion of a credit risk assessment model using key factors.
Abstract Blockchain has recently been associated to Supply Chain Management to solve several problems and change operations management processes. The study proposes to analyse three different scenarios of the Parmigiano Reggiano supply chain considering blockchain technology as an enabler for the use of other technologies such as RFID and the Internet of Things (IoT) and for the exploitation of the Vendor Managed Inventory (VMI) strategy. The study is based on the evaluation of three agent-based simulation scenarios, a traditional "as is" scenario, a second "to be" scenario implementing emerging technologies including blockchain, and a third “to be” scenario that combines the second one with the VMI optimization strategy. The results show how the combined adoption of these technologies improves the procurement process and customer satisfaction. Findings highlight the impacts that the different scenarios have on the supply chain operations in a quantitative way and allows to evaluate the changes in supply chain processes. By employing emerging technologies, order management activities are more automated and time to order and lead time order preparation are reduced. However, to achieve these performances, other data capture tools such as RFID and IoT are needed. Finally, the introduction of the VMI strategy, when enabled by blockchain technology, improves the procurement performances and significantly reduces unfilled orders.
Tejdeep Sai Iddum, Shreyas Sahu, R Sujatha, C. V. Ravi Kumar
In recent years, compared to traditional supply chain systems Blockchain technology provides countless opportunities and potential to improve and develop the framework in a supply chain management model. We developed a client-side application which acts as a supply chain management platform built using Blockchain technology and Web3-net that provides access to cutting-edge services which include inventory tracking, order placement and product attribute information log. Cryptocurrency transactions are stored on a shared, digital ledger called a blockchain. This decentralized technology is spread across many computers and records every transaction. The platform provides secure and authentic information to its users at all stages using a decentralized app or DAPP which we have developed to ensure a seamless experience for verifying and maintaining data regarding all inventory parts and orders. This paper gives a model demonstration of the implementation of Blockchain Technology at the industry level. However, additional functionalities can be added in the future with enhanced compatibility.
Despite the touting value of blockchain technology (BT), many agri-food supply chains are still struggling to the adoption of it. In this article, incorporating the benefit and cost associated with BT, we seek to answer whether and under what conditions can two competing agri-food supply chains benefit from the adoption of BT, and how government choose optimal subsidy scheme to promote the adoption of BT. The findings suggest that the Nash equilibrium outcome toward BT adoption strategy will be greatly affected by key parameters, such as competitive intensity, the growth rate of the market size and the investment cost with the adoption of BT, and the planting cost of the agri-food. Specifically, early adopter can always snatch more benefit from the adoption of the BT than the follower, and the gap between them will be increased in the competition intensity. In addition, the decisions selected by agri-food supply chains does not always benefit the consumer surplus and the social welfare, which call for further government subsidy scheme to promote the adoption of BT. The findings provide important implications for both the industrial managers and policy makers on how to benefit from BT in the digital transformation era.
In the face of increasingly complex market environment, supply chain members pay attention to the possibility of obtaining expected profits and various risks while considering profit maximization. The behaviors of decision makers are often influenced by their psychological preferences, and loss aversion is one of the basic characteristics of human economic behavior. We research the supply chain coordination problem with capital constraint and loss-averse retailer in the case of stochastic production and demand. In order to address the loss aversion, a novel utility function is structured according to the theory of mental account. Under wholesale price contract, the optimal expected utility of supply chain under decentralized decision is smaller than that under centralized decision due to the retailer’s constrained capital. Based on that, a model is constructed by making revenue sharing contract act as the dual role of supply chain coordination and delayed payment strategy without seeking external financing or internal financing, and the contract conditions and optimal decisions of the coordinated supply chain are solved. Theoretical analysis indicates that when the contract parameters are properly selected, even though the retailer’s capital is constrained, the revenue sharing contract can not only coordinate the supply chain but also realize the arbitrary distribution of supply chain profits within a certain range. Finally, the change of decision variables and expected utility or profit with contract parameters is analyzed by several numerical examples.
Rubens Moura de Carvalho, Helena Inácio, Rui Pedro Marques
To assess the financial statements of companies that invest in stablecoin, a digital representation of a fiat currency managed and backed by a blockchain, the auditor must collect evidence of transactions from the blockchain (on-chain) or from an off-chain ledger managed by an intermediary. This study aims to expand the understanding of such transactions, outline possible configurations for the recognition of stablecoin balances and transactions in financial statements, and audit procedures for collecting evidence of these transactions. Based on actual transactions of stablecoin registered on the Ethereum blockchain, we present a hypothetical case of the accounting history of an audited company to demonstrate the challenges in establishing accounting and audit procedures for these novel transactions. We observe an abundance, diversity, and unprecedentedness in the stablecoin transactions studied. We further identify the need to adapt current audit procedures and create new ones, and rethink the very process of doing so. The findings could help auditors obtain more significant knowledge of the information required to assess a company’s financial statements when such statements include stablecoin transactions. In addition, the study addresses the evolving relationship between auditing, accounting, and information technology, and the problems in integrating accounting and information technology.
Aaliya Sarfaraz, Ripon K. Chakrabortty, Daryl Essam
The profitability of a supply chain (SC) is proportional to the stability of all its stakeholders as well as their consistent information sharing with an effective and efficient communication mechanism. Various inefficiencies, such as the bullwhip effect (BWE) and product unavailability, may be caused by a lack of coordination in an SC. The importance of sharing consumer demand has been quantified by comprehensive studies under the assumption that all SC participants will access the same information. However, only a few studies have studied the effect of minimal coordination or limited visibility of information while considering their effect on the overall efficiency of an SC. This work primarily leverages blockchain technology (BCT) to create a simulation model. To do this, an SC BWE-based model is initially developed. Following that, a blockchain-based robust information sharing system is simulated. Furthermore, information sharing is challenging, and SC stakeholders may not really trust each other and hence be reluctant to share sensitive information. Considering that, this paper propose an improved proof-of-authority (PoA) consensus algorithm that will increase trust in a decentralized SC model. Multiple experiments are carried out to demonstrate the effectiveness of our approach, and the simulation results clearly demonstrate the effectiveness of information sharing in a supply chain via blockchain, as well as that trust between partners tends to increase overall SC efficiency and reduce BWE.
Marin Jovanovic, Nikola Kostić, Ina M. Sebastian, Tomaz Sedej
The proliferation of blockchain-based platform ecosystems in recent years has prompted scholars across various disciplines to explore the conditions leading to their successful deployment. However, developing a blockchain-based platform ecosystem creates various challenges for the platform sponsor that may influence industry-wide adoption and, ultimately, the platform's success. This study follows the development of TradeLens, a leading global shipping platform ecosystem underpinned by blockchain technology. We examine the factors affecting industry-wide adoption among global supply chain actors by unpacking platform value drivers and platform governance mechanisms identified at TradeLens. While the platform value hinges on the digitalization of workflows and the ecosystem leverage, the platform governance includes strategic (off-chain), technology (on-chain), and interoperability (on- and off-chain) governance – as mechanisms for effectively managing a blockchain-based platform ecosystem. This paper contributes to the literature on blockchain-based platform ecosystems and the platform literature.
The importance of honesty among blockchain validators can not be overemphasized, especially as blockchain is used by many as an underlying technology for the development of various Industry 4.0 solutions. In the blockchain consensus process, validators validate the correctness of transactions and propose new blocks for addition to the blockchain. They are rewarded for this task with the blockchain native token (e.g., ETH on the Ethereum blockchain). This reward is often distributed among validators with respect to their staked amount. An increasing number of validators joining the network leads to a decreasing chance of a validator being chosen for the validation task and thus a reduction in the validation reward. This situation results in some form of competition among the validators, leading them to carry out various malicious actions to influence the blockchain validator selection protocol in order to be chosen. In this paper, we examine the competitive interactions between validators in a blockchain consensus process and propose a model using an infinitely repeated game model that ensures that the validators are deterred from behaving maliciously while also encouraging a self-policing notion due to the extra incentive mechanism of an improved reputation score when a validator can verifiably report malicious activities by others. Further, we discuss the factors that can incentivize or disincentivize a validator to either continue to behave honestly or switch to dishonest behavior.