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The differential impact of corporate blockchain-development as conditioned by sentiment and financial desperation

Cioroianu, Iulia orcid logoORCID: 0000-0002-5543-6819, Corbet, Shaen orcid logoORCID: 0000-0001-7430-7417 and Larkin, Charles orcid logoORCID: 0000-0002-0352-2504 (2020) The differential impact of corporate blockchain-development as conditioned by sentiment and financial desperation. Journal of Corporate Finance, 66 . ISSN 0929-1199

This paper investigates how companies can utilise Twitter social media-derived sentiment as a method of generating short-term corporate value from statements based on initiated blockchain-development. Results indicate that investors were subjected to a very sophisticated form of asymmetric information designed to propel sentiment and market euphoria, that translates into increased access to leverage on the part of speculative firms. Technological-development firms are found to financially behave in a profoundly different fashion to reactionary-driven firms which have no background in ICT technological development, and who experience an estimated increased one-year probability of default of 170bps. Rating agencies are found to have under-estimated the risk onboarded by these speculative firms, failing to identify that they should be placed under an increased degree of scrutiny. Unfiltered market sentiment information, regulatory unpreparedness and mispricing by trusted market observers has resulted in a situation where investors and lenders have been compromised by direct exposure to an asset class becoming known for law-breaking activity, financial losses and frequent reputational damage.
Item Type:Article (Published)
Additional Information:Article number: 101814
Uncontrolled Keywords:Investor Sentiment; Blockchain; Leverage; Idiosyncratic Volatility; Social Media
Subjects:Business > Finance
DCU Faculties and Centres:DCU Faculties and Schools > DCU Business School
Official URL:https://dx.doi.org/10.1016/j.jcorpfin.2020.101814
Copyright Information:© 2020 Elsevier. (CC BY-NC-ND-4.0)
Use License:This item is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 3.0 License. View License
ID Code:25906
Deposited On:27 May 2021 11:40 by Thomas Murtagh . Last Modified 30 Nov 2022 04:30

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