Blockchain integration in supply chain finance: a catalyst for improved cost of capital

Purpose Supply chain finance (SCF) is a method that reduces capital expenses and boosts corporate performance. Blockchain technology in SCF could improve supply chain performance. The literature does not provide sufficient empirical evidence to support these claims. This study examines the relationship between blockchain adoption, SCF and the cost of capital. Design/methodology/approach Based on transition theory, this study examined the data of the S&P 500 and Nasdaq Blockchain Economy Index firms from 2017 to 2023 using quantile regression. Findings The results show that SCF reduces the cost of capital. Blockchain technology adoption further strengthens our model’s negative association between SCF adoption and capital costs. Research limitations/implications The managers of the firms, especially those with higher costs of capital, can adopt suitable SCF solutions in their operations as a method to bring down the cost of capital. The government can mandate SCF adoption to help firms, especially smaller ones, to reduce the cost of capital. The study is confined to a developed country, and findings must be generalised with the utmost care. Practical implications The findings provide new perspectives and actionable insights for improvements in supply chain and financial efficiency. Managers can prioritise SCF adoption aided by blockchain to reduce capital costs for the organisation, thereby improving organisational performance and profitability. The government can mandate SCF to help smaller firms in reducing the cost of capital. Originality/value To the best of our knowledge, this is the first study establishing the connection between SCF adoption, blockchain and cost of capital using secondary data of a developed country.