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

Are blockchain-based digital transformation and ecosystem-based business models mutually... 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Eurasian Business Review Springer Journals

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

Eurasian Business Review , Volume OnlineFirst – Jul 19, 2022

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Publisher
Springer Journals
Copyright
Copyright © The Author(s) under exclusive licence to Eurasia Business and Economics Society 2022
ISSN
1309-4297
eISSN
2147-4281
DOI
10.1007/s40821-022-00209-0
Publisher site
See Article on Publisher Site

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.

Journal

Eurasian Business ReviewSpringer Journals

Published: Jul 19, 2022

Keywords: Corporate governance; Digital transformation; Ecosystems; Corporate voting; Shareholder activism; G32; G34

References