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Published in: Eurasian Business Review 4/2022

19-07-2022 | Regular Article

Are blockchain-based digital transformation and ecosystem-based business models mutually reinforcing? The principal-agent conflict perspective

Authors: Ilya Ivaninskiy, Irina Ivashkovskaya

Published in: Eurasian Business Review | Issue 4/2022

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Abstract

This paper explores the implications of digitalization and business model innovation for the principal-agent conflict. Continuous digital transformation has recently become a feature sine qua non for companies. It is also stimulating business model innovation resulting in the growing adoption of ecosystem-based models. These trends may have significant implications for the principal-agent relationship, essential for understanding value creation by a firm. In order to analyze the impact of digital transformation, we use blockchain technology as a proxy. To measure the potential impact on the principal-agent conflict, we study management and shareholder-sponsored proposals at annual meetings. The level of shareholder involvement in governance is measured based on the number of shareholder-sponsored proposals received. In addition, we measure shareholder support for management-sponsored proposals. A sample of 2481 NYSE, Nasdaq and AMEX-traded firms for the period 2015–2019 is used. First of all, we show that digitalization per se has a mitigating impact on the agency conflict. Shareholders become more active, albeit not more hostile towards management. Secondly, we have identified the strongest impact in such sectors as information technology, communications, finance, and healthcare. These are the most significantly impacted by ecosystem-based business model innovation. We conclude that digitalization and ecosystem-based business models are mutually reinforcing in mitigating the principal-agent conflict.
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Footnotes
2
De N. Warren Buffet: Bitcoin Is a ‘Delusion’ But Blockchain Is ‘Ingenious’. Coindesk. 2019. Available at https://​www.​coindesk.​com/​warren-buffet-bitcoin-is-a-delusion-but-blockchain-is-ingenious., accessed on 28.02.2021. Full interview to CNBC is available at https://​www.​youtube.​com/​watch?​v=​2hdDE7XYr30 accessed on 11.10.2021.
 
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Metadata
Title
Are blockchain-based digital transformation and ecosystem-based business models mutually reinforcing? The principal-agent conflict perspective
Authors
Ilya Ivaninskiy
Irina Ivashkovskaya
Publication date
19-07-2022
Publisher
Springer International Publishing
Published in
Eurasian Business Review / Issue 4/2022
Print ISSN: 1309-4297
Electronic ISSN: 2147-4281
DOI
https://doi.org/10.1007/s40821-022-00209-0

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