Blockchain and the multinational enterprise: Progress, challenges and future research avenues

In the past two decades, digital technologies have substantially changed the ways in which individuals and firms communicate and transfer knowledge, with wide-ranging implications for organisations and institutions. From an organisational perspective, the emergence of digital technologies has enhanced the materialisation of new business models (Foss and Saebi, 2017; Rachinger et al., 2019), the personalisation of products and services (Cenamor et al., 2017), the relation of trust between market agents and asymmetries of information (Urena et al., 2019), new products and services (Matt et al., 2015) and the pace of product life-cycles (Seetharaman et al., 2018), to name a few. This digital transformation has far-reaching implications for organisations but is particularly important to multinational enterprises (MNEs) as it allows them to reduce the liability of foreignness (Johanson and Vahlne, 2009), enhance knowledge creation and improve knowledge transfer and learning (Gaur et al., 2019), augment trust-building (Monaghan et al., 2020), build agile global value chains (GVCs) (Kano et al., 2020) and improve the speed of internationalisation (Oviatt and McDougall, 1994). All this results in a reduction of uncertainties and thus lowers the risk perception (Clarke and Liesch, 2017), which impels international commitment decisions. An important new technology with potential for significant and wide-ranging impacts is blockchain. With this technology it is now possible to, for example, transfer the ownership of physical assets, such as cars and real estate, stocks, bonds and money over the internet through digital contracts (Andreesen, 2014). The changes that blockchain technology brings about leave academics, businesses and governments grappling with the consequences. Academic research has focussed on the economics of blockchains (Evans, 2014; Davidson et al., 2016) and blockchain use cases, especially in the financial, information and communications technology, and public sectors (Bohme et al., 2015; Friedlmaier et al., 2017; Tapscott and Tapscott, 2016). Because blockchain has multiple barriers to widespread adoption (Iansiti and Lakhani, 2017), researchers have explored regulatory barriers to the adoption of cryptocurrencies and smart contracts (Caytas, 2017; Werbach and Cornell, 2017) as well as technical barriers, such as scalability, interoperability, performance and data privacy (Hileman and Rauchs, 2017; Yli-Huumo et al., 2016). Tapscott and Tapscott (2016) argue that blockchain constitutes an institutional innovation, the “cryptoeconomy” – an economic system not defined by geographic location, political structure or legal system, but which uses cryptographic techniques to incentivise appropriate behaviour of participants in place of using trusted third parties (Pilkington, 2016). From this perspective, blockchains are platforms for building economic coordination using distributed ledgers augmented with computational features, such as money (cryptocurrencies), programmable contracts (e.g. smart contracts) and organisations made of software (DAOs, or distributed autonomous organisations). Thus, blockchain technology is not only innovative but also is a building block for new forms of economic governance and socio-political order (Davidson et al., 2016). Despite the critical importance of digital technologies, such as blockchain and organisations’ digital transformations, the international business (IB) literature has been slow to unpack the implications for organisations’ internationalisation motivations and processes. Furthermore, and more recently, the emergence of fully digital organisations, such as digital platforms (Uber or Airbnb), social media (Facebook or Twitter), e-commerce (Taobao) or financial services (TransferWise), are still very much a black box to IB literature. With this special issue, we aimed to uncover a small part of the necessary embracement that the IB field needs to achieve to be prepared to perform their societal role of informing managers, entrepreneurs, officials and other agents of change. To do so, we look specifically at the implications of blockchain technology in the IB field. While IB literature is lagging behind in the study of blockchain, MNEs are – and have been for some time – actively exploring blockchain’s potential, particularly in the financial (Bohme et al., 2015), compliance (Anjum et al., 2017), healthcare (Mettler, 2016), data protection (Finck, 2018) and logistics (Hackius and Petersen, 2017) contexts. In China alone, by the end of March 2020, a total of 35 MNEs (including Microsoft, Oracle, Mastercard, Sony, Intel and Walmart) applied for 212 blockchain-related patents (Global Times, 2020). As explained elsewhere (Finextra, 2017), banking and finance now account for some 30% of blockchain use cases, and nearly 70% of central banks are experimenting with blockchain technology. Entrepreneurial start-ups and initial coin offerings – a form of crowd funding made possible because of blockchain (Kastelein, 2017) – have been the drivers behind an unprecedented surge of innovation, ranging from new, competing protocols (e.g. Tezos and EOS) to smart contracts on Ethereum, decentralised applications (e.g. Telegram), and new currencies with unique features (e.g. monero and zcash) (Vereckey, 2018). Thus, and more than ever, we need to push the blockchain agenda and investigate its implications for IB. In the following sub-sections, we outline the key implications of blockchain technology in the context of IB.