We develop a dynamic asset pricing model of cryptocurrencies/tokens that allows users to conduct peer-to-peer transactions on digital platforms. The equilibrium value of tokens is determined by aggregating heterogeneous users’ transactional demand rather than discounting cash flows, as is done in standard valuation models. Endogenous platform adoption builds on user network externality and exhibits an S-curve: it starts slow, becomes volatile, and eventually tapers off. The introduction of tokens lowers users’ transaction costs on the platform by allowing users to capitalize on platform growth. The intertemporal feedback between user adoption and token price accelerates adoption and dampens user-base volatility.

We build an endogenous growth model with consumer-generated data as a new key factor for knowledge accumulation. Consumers balance between providing data for profit and potential privacy infringement. Intermediate good producers use data to innovate and contribute to the final good production, which fuels economic growth. Data are dynamically nonrival with flexible ownership while their production is endogenous and policy-dependent. Although a decentralized economy can grow at the same rate (but are at different levels) as the social optimum on the Balanced Growth Path, the R&D sector underemploys labor and overuses data—an inefficiency mitigated by subsidizing innovators instead of direct data regulation. As a data economy emerges and matures, consumers’ data provision endogenously declines after a transitional acceleration, allaying long-run privacy concerns but portending initial growth traps that call for interventions. This paper was accepted by Kay Giesecke, finance.

Public equity is an important source of risk capital, especially in China. The Chinese government has occasionally suspended IPOs, exposing firms already approved to IPO to indeterminate listing delays. The temporary bar on going public increases uncertainty about access to public markets for affected firms. We show that suspension-induced delay reduces corporate innovation activity both during the delay and for years after listing. Negative effects on tangible investment and positive effects on leverage are temporary, consistent with financial constraints during the suspensions being resolved after listing. Our results suggest that predictable, well-functioning IPO markets are important for firm value creation. They demonstrate that corporate innovation is cumulative and is negatively affected by policy uncertainty. This paper was accepted by Gustavo Manso, finance.

We present the first systematic approach to detect fake transactions on cryptocurrency exchanges by exploiting robust statistical and behavioral regularities associated with authentic trading. Our sample consists of 29 centralized exchanges, among which the regulated ones feature transaction patterns consistently observed in financial markets and nature. In contrast, unregulated exchanges display abnormal first significant digit distributions, size rounding, and transaction tail distributions, indicating widespread manipulation unlikely driven by a specific trading strategy or exchange heterogeneity. We then quantify the wash trading on each unregulated exchange, which averaged more than 70% of the reported volume. We further document how these fabricated volumes (trillions of dollars annually) improve exchange ranking, temporarily distort prices, and relate to exchange characteristics (e.g., age and user base), market conditions, and regulation. Overall, our study cautions against potential market manipulations on centralized crypto exchanges with concentrated power and limited disclosure requirements and highlights the importance of fintech regulation. This paper was accepted by David Simchi-Levi, Special Section of Management Science: Blockchains and Crypto Economics. Funding: This research was partly funded by the Ewing Marion Kauffman Foundation [Grant G-201907-6995], the National Natural Science Foundation of China [Grants 72192802, 72192800, and 72192801], Ripple’s University Blockchain Research Initiative (UBRI), and the FinTech at Cornell Initiative. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2021.02709 .

Using administrative universal business registration data as well as primary offline and online surveys of small businesses (including unregistered self-employments) in China, we examine (i) whether digitization helps small and medium enterprises (SMEs) better cope with the COVID-19 pandemic and (ii) whether the pandemic has spurred digital technology adoption. We document significant economic benefits of digitization in increasing SMEs’ resilience against such a large shock, as seen through mitigated demand decline, sustainable cash flow, ability to quickly reopen, and positive outlook for growth. After the January 2020 lockdown, firm entries exhibited a V-shaped pattern, with entries of e-commerce firms experiencing a less pronounced immediate drop and a quicker rebound. Moreover, the pandemic has accelerated the digital transformation of existing firms and the industry in multiple dimensions (e.g., altering operation scope to include e-commerce, allowing remote work, and adopting electronic information systems). The effect persists more than one year after reopening, and it is more pronounced for certain sectors, firms in industrial clusters, and areas with more digital inclusion but less financial efficiency, constituting initial evidence for the long-term impact of the pandemic and the supposedly transitory mitigation policies. This paper was accepted by David Simchi-Levi, finance. Funding: This research was funded in part by the China Natural Science Foundation [Grants 71874008, 71441008, 71873121, and 72192844], Peking University, the Kauffman Foundation [Junior Fellowship], and the FinTech Chair at Paris–Dauphine University–Université Paris Sciences et Lettres. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.02424 .

Over the past decade, blockchains and cryptocurrencies have taken a central stage in financial technology (FinTech) innovation. In 2020–2021, as the academic finance and management community began actively investigating this domain, we issued a call for papers for a special issue to encourage interdisciplinary research in this emerging area. This section of Management Science presents the first systematic collection of knowledge, both theoretical and empirical, focusing on blockchain economics, crypto assets, decentralized finance, and Web3 ecosystems. We describe the editorial protocol employed for this special issue (now included in this volume as a special section), summarize what we learn about the field, and introduce the 15 articles included in the special section. We also offer several observations to highlight foundational issues in the new field and to guide future research in this exciting new area at the intersection of technology and finance.