FACULTY AND RESEARCH

We investigate the potential and limits of privacy-preserving corporate blockchain applications for information provision. We provide a theoretical model in which heterogeneous firms choose between adopting a blockchain application or relying on traditional third-party intermediaries to inform the capital market. The blockchain's ability to generate information depends on each firm's data profile and all firms' endogenous adoption decisions. We show that blockchain technology can improve the information environment and outperform traditional institutions, with firms' adoption decisions serving as a credible value signal and the application uncovering firm values by analyzing all participating firms' data. However, we also characterize an adverse mixed-adoption equilibrium in which neither of the two channels realizes its full potential and information provision declines not only for individual firms but also in aggregate. The equilibrium is a warning sign that has broad implications for policymakers' regulatory effort and investors' assessment of corporate blockchain applications.