Blockchain adoption and supplier concentration: A transaction cost theory perspective

This paper examines how blockchain adoption reshapes firms' supplier relationships through the lens of transaction cost economics. Exploiting the staggered implementation of blockchain electronic invoicing in China as a quasi-natural experiment, we provide causal evidence that blockchain adoption significantly reduces firms' supplier concentration. The effect is more pronounced in regions with lower social trust and among firms with lower inventory turnover, suggesting that blockchain e-invoicing lowers supplier concentration by mitigating trust-related frictions and administrative inefficiencies. Cross-sectional analyses reveal that the impact is stronger for firms with fewer related-party transactions, lower levels of digitalization, and greater bargaining power. We further find that blockchain adoption increases firms' level of supply chain finance, indicating broader financial and operational implications. Overall, our study provides novel evidence on how blockchain infrastructure reduces transaction costs and reshapes supply chain structures, contributing to the growing literature on the real effects of technological innovation in corporate finance. © 2026 Elsevier Inc.