The moderating effect of managerial discretion on blockchain technology and the firms’ innovation quality: Evidence from Chinese manufacturing firms

• Published in: International journal of production economics Vol. 240; p. 108219
• Main Authors: Chin, Tachia, Wang, Wannan, Yang, Meng, Duan, Yunlong, Chen, Yantai
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.10.2021
• Subjects: Blockchain technology; Innovation quality; Managerial discretion; Moderating effect; Managerial discretion; Moderating effect; Blockchain technology; Innovation quality
• ISSN: 0925-5273; 1873-7579
• DOI: 10.1016/j.ijpe.2021.108219

Along with the flourishing development of digital technology, blockchain technology emerged and has been developed for a broad spectrum of applications. As an emerging digital technology, blockchain provides firms with new ways of creating and capturing value, new information exchange mechanisms and trading systems, as well as new organizational forms. In recent years, Some studies have noted that blockchain technology plays an imperative role in manufacturing firms' innovation quality. However, relevant research considering the effect of blockchain technology on innovation quality is still poorly elaborated. At the same time, we put forward that managerial discretion also has considerable implications for innovation. Given that blockchain technology is still in the experimental stage for business use, managers would rather adopt other technologies that bring profits in the short term than blockchain technology as far as their stakeholders' satisfaction is concerned. For this reason, managers with higher managerial discretion are more likely to leverage blockchain technology to facilitate innovation. Yet, little research has focused on the critical role of managerial discretion on firms’ innovation quality. Taking together the foregoing discussions, this paper is designed to analyze the impact of blockchain technology on innovation quality. We also divide managerial discretion into environmental discretion, organizational discretion, and additional discretion in the Chinese context, analyzing their moderating effects on the relationship between blockchain technology and innovation quality respectively. Further, relevant hypotheses are tested empirically using a panel data set of Chinese listed manufacturing firms involved in the blockchain business from 2012 to 2019. The findings are listed as follows: With an increasing expenditure on blockchain technology, firms' innovation quality exhibits an initially decreasing trend and then an increasing trend. Additionally, it is proved that environmental discretion, organizational discretion and additional discretion in the Chinese context all positively moderate the relationship between blockchain technology and firms' innovation quality.