Dynamic Simulation Research on the Effect of Governance Mechanism on Value Co-Creation of Blockchain Industry Ecosystem

Abstract

The development of blockchain technology promotes the evolution of the industrial ecosystem, and the value co-creation in the ecosystem has become an important factor for the sustainable and coordinated development of the blockchain industry ecosystem. By answering the question of how governance mechanisms affect the value co-creation of the blockchain industry ecosystem, this paper aims to clarify the realization mechanism of value co-creation of the blockchain industry ecosystem. Based on the transaction cost theory and social exchange theory, the governance mechanisms of the blockchain industry ecosystem are divided into contract governance and trust governance. The system dynamics method is used to analyze the causality of the effect of governance mechanisms on value co-creation of the blockchain industry ecosystem, the model of system flow chart is established, and Vensim PLE software is used to perform simulation and sensitivity analyses of the model. The results show that: both contract governance and trust governance can positively affect the value co-creation of the blockchain industry ecosystem; due to the existence of bounded rationality, compared with contract governance, trust governance has a more significant impact on system resource innovation and value co-creation; there is a co-existence effect among contract governance and trust governance, and compared with the single effect, the co-existence effect of two can promote the value co-creation process of the blockchain industry ecosystem more actively. The research results reveal the internal laws of the value co-creation and provide valuable insights into the exploitation of governance mechanisms to facilitate effectively the value creation of the blockchain industry ecosystem.

1. Introduction

With the development of digital economy, the scientific and technological revolution and industrial transformation represented by new technologies such as big data, cloud computing and blockchain are sweeping the world [1]. As a subversive technology, blockchain is promoting the transformation from ‘information internet’ to ‘value internet’ [2]. Blockchain technology has full potential to form an open value exchange network that was previously impossible and unimaginable, and further build a value exchange ecosystem [3,4]. In ‘the 14th five-year plan of China’, the blockchain was incorporated into ‘the national five-year plan’ for the first time. A symbiotic and vibrant blockchain industry ecosystem can promote the optimal combination of all factors such as technology, management, finance and industry [5], deepen the integration of blockchain technology application and industrial transformation and upgrading, and promote the practice process of the blockchain industry ecosystem and form a scientific and sustainable industrial ecological mechanism through the innovation-driven path. However, the ‘intrusion’ of blockchain has a certain impact on the original regional industrial structure and development model in the process of industrial integration, which affects the overall development level of the blockchain industry ecosystem [6,7]. Besides this, there is an obvious phenomenon of ‘independent governance’, the ‘disintegration’ between the main body and the lack of good interaction in the process of industrial operation, restricting the coordinated development of the system as a whole [2]. Therefore, how to make all subjects participate in the process of value creation and jointly promote the collaborative evolution of the blockchain industry ecosystem, has become an important problem to be solved to promote the healthy development of the industry.

Value co-creation is a process in which the blockchain industry ecosystem improves its ability to create value, restructures the value chain and industry chain, innovates resources and upgrades the system structure [8]. The participants of the ecosystem can interweave with each other and form a complex dynamic value network in the interactive process. In the blockchain industry ecosystem, value is at the core and how to create greater value through the interactive process of various participants in the ecosystem is the key research content [9]. At the same time, in the process of competition and cooperation, all participants not only pursue their own interests, but also form the common value appeal in the coordinated operation of the system. In order to maximize the overall interests, it is necessary to establish an effective governance mechanism to restrict and coordinate the relationship among members of the system [10]. It is an important prerequisite for the effective operation of the industrial chain and the ecosystem to create value through the blockchain governance mechanisms.

Among the factors influencing the development of the blockchain industry, ‘The white paper on China’s blockchain industry of 2018’ analyzes the impact of regional environment, resource investment, technological innovation, institutional norms and other factors on the development of the blockchain industry. After analyzing the development of the blockchain industry, Grima et al. [6] believe that the development of the blockchain industry is not only affected by policy factors, but also affected by the optimal allocation of resources and technological innovation. The evolution of blockchain at the system level has strengthened its viability and driven the development of relevant supporting technologies. In addition, many scholars focus on the characteristics of decentralization, openness, P2P network and consensus mechanism of blockchain technology, and study the impact of blockchain technology application on data security and traceability, so as to promote the healthy development of industrial ecosystem [11,12]. Through a detailed review of the research of the blockchain industry, it is found that most of the studies focus on the blockchain technology itself and the underlying mechanism of its application to industrial development, while there are relatively few discussions on the relationship between governance mechanisms and value co-creation from the perspective of the blockchain industry ecosystem. The related research is mostly carried out from the static perspective, lack the support of quantitative research and more in-depth system theoretical analysis, and ignore the dynamic relationship of value creation among subjects in the complex dynamic evolution process of the blockchain industry ecosystem.

There is a consensus that value co-creation of the blockchain industry ecosystem is not a simple linear process, but a complex dynamic process [2,3], which not only includes the innovation process of resource input-resource innovation-achievement transformation, but also involves the value interaction and creation process of blockchain enterprises, blockchain platforms and users, showing a certain dissipative characteristic. System dynamics is a subject founded by Forrester to analyze and simulate dynamic complex systems [13]. With nonlinear and causality characteristics, it has been favored by many scholars in the study of the construction and evolution of industrial ecosystems and are in line with the research requirements for a dynamic exploration of the relationship between the governance mechanisms of industry ecosystem and value co-creation [14,15].

Therefore, focusing on the core issue of how contract governance and trust governance affect the value co-creation of the blockchain industry ecosystem, we aim to clarify the realization mechanism of value co-creation of the blockchain industry ecosystem from the perspective of governance. Based on the transaction cost theory and social exchange theory, the system dynamics method is used in this paper to establish a system dynamics model for the process of value co-creation affected by the governance mechanisms of the blockchain industry ecosystem and to perform simulation that explores the effect of the contract governance, trust governance and their interaction on the value co-creation of the blockchain industry ecosystem. This study can not only enrich the research of value co-creation from the perspective of governance, but also provide a reference for the participants of ecosystem to select the appropriate governance mechanism and improve the efficiency of value co-creation in the blockchain industry ecosystem. The paper is structured as follows: Section 2 reviews and discusses the related works. Section 3 constructs the system dynamics model of the study. Simulation and sensitivity analyses are presented in Section 4. Finally, the conclusions and implications are presented in Section 5.

2. Literature Review

2.1. Value Co-Creation of the Blockchain Industry Ecosystem

The earlier study focusing explicitly on value co-creation was the research of service economics in the 19th century and then the theory of value co-creation went through the development from ‘user led logic’ to ‘service led logic’ [16]. After that, most scholars made conceptual and theoretical discussions from the aspects of participants, processes and situations of value co-creation [17,18]. The value co-creation of the blockchain industry ecosystem is mainly reflected in the value interaction of stakeholders, among which the value interaction process between blockchain platform, blockchain enterprises and users is the most representative [19]. Firstly, from the platform and enterprises level, the improvement of blockchain platform support has attracted many blockchain enterprises and stakeholder institutions. The blockchain platform has received a certain commission. At the same time, it also timely feeds back the needs of users to enterprises, so as to promote the resource investment and the product innovation of enterprises [20,21]. Secondly, from the platform and user level, the services provided by the blockchain platform not only meet the personalized user needs, but also help users obtain a new experience of existing products [22]. User experience is the foundation of value creation, and users’ reliance on the platform brings about the improvement of platform value [8,9]. Finally, from the enterprise and user level, the user demand is the source of resource investment and product innovation of enterprises [17]. In this process, blockchain enterprises not only meet the user needs but also realize the growth of their own economic value.

In short, the value co-creation of the blockchain industry ecosystem is essentially to build a solid ‘triangular’ value interaction chain between the blockchain platform, blockchain enterprises and the users. The higher the quality of interaction between these three, the deeper the degree of value co-creation [3,23,24]. In addition, the value co-creation of the blockchain industry ecosystem also needs to consider the process of resource innovation, such as the satisfaction of user needs, the construction of blockchain platform and the growth of enterprise economic value, all of which are inseparable from the investment and innovation of internal and external resources [25,26]. Moreover, the absorption and transformation efficiency of innovation achievements will directly affect the value co-creation of the blockchain industry ecosystem [19,22]. Based on the above analysis, the research on value co-creation of the blockchain industry ecosystem in this paper will consider the transfer process and elements of value co-creation comprehensively.

2.2. Governance Mechanisms of the Blockchain Industry Ecosystem

The core of blockchain industry ecosystem governance is to build an effective governance mechanism to coordinate, restrict and motivate the behaviors of members in the system to ensure the efficient and orderly operation of the ecosystem system [27,28]. As for the classification of governance mechanism, the typical ones are contract governance and trust governance based on ‘transaction cost theory’ and ‘sociological theory’. Contract is the core of inter-enterprise cooperation [9,24]. Reaching cooperation and creating value by concluding contracts has become an important means to enhance enterprise capabilities and gain competitive advantages. Contract governance emphasizes that the cost of the cooperation process can be reduced by signing a formal contract to stipulate the rights and responsibilities of each member [29]. The strength of contract governance reflects the fairness of transactions and the constraints on opportunism in the blockchain industry ecosystem [30]. In recent years, scholars have mostly studied contract governance from the two dimensions of contract control and contract coordination [31]. By specifying the rights and obligations of stakeholders, contract control strengthens the management of moral hazard behaviors and reduces the possibility of opportunistic behaviors such as breach of contract and harming the interests of partners [21]. Contract coordination promotes routine communication and resource sharing in the ecosystem through periodic written communication, which is conducive to reaching consensus on objectives and effectively promoting value creation activities [25]. However, in today’s complex and dynamic environment, the rapid change and unpredictable degree of the external background faced by the blockchain industry ecosystem are important factors affecting the value co-creation process and a relevant question is how to better cope with the changes brought about by uncertainty. The function of contract adaptation is particularly important. Contract adaptation can make continuous adjustments with its flexibility and toughness to improve the value co-creation and help the ecosystem achieve sustainability in the changing dynamic environment [32].

Transaction cost theory believes that opportunistic behavior will limit the willingness to cooperate among partners and affect the realization of the expected objectives of the ecosystem, so risks are controlled by signing contracts [33]. However, due to the existence of a large number of potential contingency factors, the value interaction within the ecosystem is highly uncertain, and there is ‘bounded rationality’, so the contract cannot pre-determine all possible unexpected events in the future [25]. Dyer et al. [34] emphasized the social attribute of economic transactions and believed that trust governance plays an important role in preventing opportunistic behavior and is an important prerequisite for enterprises to reach cooperation. The trust governance emphasizes an atmosphere of mutual trust [35]. In the blockchain industry ecosystem, the relationship between members has multiple complexities, including both cooperative and competitive relationships, but as the ‘lubricant of society’, the trust governance of the blockchain industry ecosystem can improve the flexibility of rules and the relationship between partners, promote resource exchange and information exchange, and build the confidence of value co-creation, so as to avoid the potential high-cost risk caused by the interaction process [21,27]. Zhou et al. [36] believe that trust governance can help strengthen communication and cooperation between partners, stop illegal behavior, reduce search costs, reduce contract execution, communication coordination and opportunistic behavior, and promote the smooth process of value co-creation. As for the dimensions of trust governance, the widely used ones are calculation trust, understanding trust and identification trust divided by Luu et al. [35,37], and on the basis of literature review, we find that understanding and identification are mostly based on the establishment of relationship [24,28,29]. Therefore, in this research, we adopt two dimensions of calculation trust and relationship trust.

2.3. Effect of Governance Mechanisms on Value Co-Creation

The effect of contract governance on value co-creation is mainly reflected in the control of system risk and the coordination and adaptation of value creation process [21,23]. In the interactive process between blockchain platform, blockchain enterprises and users, the incompleteness of information, asymmetry of distribution and uncertainty of environment will increase the transaction cost and risk of the system [38]. Adopting formal contracts to formulate corresponding rules can effectively reduce the impact of these adverse factors and ensure the normal operation of the system and the smooth progress of value creation activities [28]. Due to the differences in the interests of system members, the formal contract is necessary to coordinate the interests between them [25,39]. In this process, contract adaptation with flexibility accelerates the transformation of innovation achievements and the efficiency of value interaction through corresponding incentive mechanisms.

The role of trust governance is mainly reflected in the relationship quality of system members. The trust provides guarantee for the establishment of long-term good relationship and the realization of common interests between system members, which not only improves the relationship quality, but also promotes the willingness of resource sharing among members [36,40]. At the same time, the trust-based interaction makes the exchange of resources and information among members more rapid, forms a resource transmission chain in the ecosystem, and reduces the obstacles of innovation [41]. In addition, the explicit contract provides a good institutional environment for resource innovation and value co-creation of the blockchain industry ecosystem [42], which becomes the guarantee for the process of long-term value co-creation. Furthermore, the trust is an important driving force for the effective operation of the contract, which can reduce the concerns of system members about the lack of contract protection [28,35,38]. These two governance mechanisms complement each other. Therefore, we consider that contract governance, trust governance and the co-existence effect of two governance mechanisms will coordinate the relationship between system members, promote system resource innovation and realize the value co-creation of the blockchain industry ecosystem.

Based on the above analysis, a conceptual model for the effect of the governance mechanisms on value co-creation of the blockchain industry ecosystem is constructed in this paper as shown in Figure 1.

3. Construction of System Dynamics Model

System dynamics (SD) is an interdisciplinary approach to quantitatively reflect the dynamic development behavior and operating mechanism of the actual system based on the feedback control theory and the computer simulation technology [13,43]. The value co-creation of the blockchain industry ecosystem is a complex dynamic process [9,17]. The resource innovation stock and the amount of value co-creation show a continuously increasing dissipation characteristic, which conforms to the basic research conditions of system dynamics. Therefore, system dynamics is used in this study for modeling and simulation to quantitatively explore the complex relationship and influence mechanism between governance mechanisms and value co-creation of the blockchain industry ecosystem. Many scholars have used the system dynamics method to analyze the complex problems in the industrial ecosystem [13,14,15].

3.1. System Description and Definition of Main Variables

System dynamics theory emphasizes that the system’s behavior and function are determined by internal factors. Therefore, one of the key steps in building the SD model is to determine a reasonable system boundary [13]. There is a complex dynamic feedback relationship in the value co-creation of the blockchain industry ecosystem. The value co-creation of the blockchain industry ecosystem, as a dynamic process, can be affected by the relevant elements and has a continuous impact on the behavior of the participants [14,15,16]. The value co-creation of the blockchain industry ecosystem is the driving force of the evolution and development of the blockchain industry ecosystem [6,7,18]. This model studies the effect of the governance mechanisms on the value co-creation of the blockchain industry ecosystem. Therefore, the internal system of the model boundary includes the participants of value co-creation, the influencing factors of value co-creation process, and the external part of the model boundary is the environment in which the system runs. According to the system description and previous literature review, the main variables that are involved in the SD model are defined as shown in

Table 1. Definition of main variables.

Variable	Meaning
Resource innovation stock	The income of innovation resources obtained through the input of innovation resource and the share of resource [14].
The amount of value loss	Value loss caused by some uncontrollable factors (such as major public emergencies, natural environment, etc.) [26].
The amount of resource inputs	Contribution willingness and input resources of each subject in the industrial ecosystem in the process of industrial innovation [12].
The number of shared resources	Information exchange and resource sharing brought by the interaction between various subjects in the industrial ecosystem [15].
Innovation obstacles	Constraining factors that limit the industrial ecosystem from achieving higher innovation results [7].
Value of blockchain platform	The value generated by the interaction process of enterprises, users and other system subjects in the blockchain platform [5,20].
Relationship quality	The close degree of cooperation and communication among various subjects in the industrial ecosystem [9].
The risk of system	The uncertainty generated by the external environment and the evolution and development of the internal system [14].
Service quality	Users’ perception of platform service and satisfaction during the use of the platform [6,9].
User value	The value generated by users when using the platform. As the number of platform users increases, the influence of the platform will also enhance [8].
Platform attraction	The attractiveness of a platform to enterprises when they make a choice to enter [9].
Contract governance	The rights and responsibilities of each system participant are defined by a formal contract. It is mainly reflected in three aspects: Contract control, contract coordination and contract adaptation [29].
Trust governance	An informal constraint, emphasizing an atmosphere of mutual trust among system participants. It is mainly reflected in two aspects: relationship trust and calculation trust [35].

.

3.2. The Causality Model and Main Feedback Loops

The causality graph is a qualitative description of the relationships among various factors in the value co-creation process of the blockchain industry ecosystem, which is a necessary process of SD model and an important basis for simulation analysis through system flow chart [13]. The value co-creation of the blockchain industry ecosystem is mainly generated in the interaction process of blockchain enterprises, blockchain platforms, users and other system subjects in the system. The choice of blockchain enterprises to enter the blockchain platform is largely influenced by the attractiveness of the platform. The more attractive the blockchain platform, the more enterprises will join and become the participants of value creation in the system. As the number of blockchain enterprises increases, the number of resources inputted in the system and the scale of the industry will also increase. The services and content provided by blockchain platform will affect user satisfaction, bringing new user demand and enhancing user value [2,15]. The improvement of user value and industrial scale promotes the increase of industrial economic value and becomes an important source of value co-creation of the blockchain industry ecosystem. At the same time, resource innovation in the blockchain industry ecosystem will affect user demand and value co-creation. The resource innovation achievements in the blockchain industry ecosystem are affected by system resources and innovation obstacles. Resource input and resource sharing in the system can increase innovation achievements [26,41], while resource innovation obstacles can reduce innovation achievements. In the process of resource innovation and value interaction, contract governance and trust governance provide a good operating environment for the system by reducing system risks, reducing innovation obstacles and forming high-quality interactive relations, which promotes the input and sharing of resources in the system and becomes an important driving force for system innovation and value co-creation. Based on the research of scholars and the above analysis, the causality of the effect of governance mechanisms on value co-creation of the blockchain industry ecosystem is constructed, as shown in Figure 2.

The causality graph suggests that the value co-creation of the blockchain industry ecosystem directly comes from the industrial economic value and the resource innovation stock, and both are positively correlated with the value co-creation. On the one hand, blockchain enterprises, users and blockchain platforms create new value in the process of interaction, which is finally transformed into industrial economic value. On the other hand, under the governance mechanisms, the amount of resource inputs provides more opportunities for innovation activities in the system, and accelerate the process of resource innovation and the efficiency of the transformation of innovation achievements. In this interactive process, the ecosystem forms complex positive and negative feedback loops, and it is in these feedback loops that value co-creation activities continue. The main positive feedback loops are as shown in Figure 3.

3.3. Model Assumptions and System Flow Chart

To define the premises and conditions for the operation of the value co-creation of the blockchain industry ecosystem, the basic assumptions of the model proposed in this paper are as follows.

Hypothesis 1 (H1).

To simplify the simulation, the model does not consider external force factors and other uncontrollable or unexpected conditions, such as the impact of COVID-19 on the blockchain industry ecosystem.

Hypothesis 2 (H2).

There is a delay in resource innovation obstacles, which is expressed by the first-order delay function. Because the realization of resource innovation in ecosystem requires a process, the innovation obstacles will not occur until 6 months after the value co-creation activities of the blockchain industry ecosystem.

Hypothesis 3 (H3).

The amount of value loss is a function of time. With the change of time and the progress of value co-creation activities, although the increase in value co-creation will be accompanied by an increase in the amount of value loss, the loss rate will gradually slow down.

System flow chart is the basis of dynamic evolution analysis using system dynamics [13,43]. According to the previous causality analysis and basic assumptions of the model, and on the basis of analyzing the data reality and calculability, the causality graph is generalized and summarized in this paper to construct a system flow chart of the effect of governance mechanisms on value co-creation of the blockchain industry ecosystem, as shown in Figure 4.

3.4. Model Equation Design

Based on the data availability, computability and reality of the blockchain industry ecosystem, reference is made to the contents of ‘The White Paper on China’s Regional Industrial Development’ and ‘The Report on China’s Blockchain Industry Ecological Map’ from 2019 to 2021. The simulation time was set as 60 months, and the simulation step was set as one month. The formula editor of Vensim Personal Learning Edition (PLE) was used to design the equation. To meet the operational needs of a system dynamics model while quantitatively studying the relationship between the variables and based on existing research and the previous causality analysis in this paper, the equations design of variables are as follows:

L1 Resource innovation stock = INTEG (R1 × 0.5 + R3 × 0.5 − R2 × 0.2, 0);

L2 Industrial economic value = INTEG (R4 + R5 – R7 + A7, 0);

L3 The amount of blockchain enterprise = INTEG (R6, 10);

The initial value of the resource innovation stock and the industrial economic value are set to 0, and the initial value of the amount of blockchain enterprise is set to 10.

R1 The number of shared resources = A2 × 0.6 + A1 × 0.5 + A3 × 0.6;

R2 Innovation obstacles = STEP (1 − A5 × 0.1 − A2 × 0.1, 6);

The resource innovation obstacles are generated after the innovation behavior, so there is a delay of the resource innovation obstacles. And the time that the resource innovation starts to encounter obstacles set to six months.

R3 The amount of resource inputs = L3 × 0.2 − A4 × 0.1;

R4 Value of blockchain platform = A5 × 0.2;

R5 User value = A6 × 0.5;

R6 The number of new enterprises = A8 × 1.2;

R7 The amount of value loss = WITH LOOKUP(Time)

([(0,0)–(60,10)], (0,0.5), (5,0.6), (15,0.7), (35,0.8), (60,0.9));

There is a certain of value loss as the increase of the amount of industrial economic value. To avoid having the system be too complicated, a linear function according to a preliminary value loss rate of 0.4 and a final value loss rate of 0.9 is used for illustration.

A1 Contract governance = C1 × C2 × C3 × A10;

A2 Trust governance = C4 × C5 × A10;

A3 Relationship quality = A1 × 0.5 + A2 × 0.6;

A4 The risk of system = 1 − 0.2 × A1;

A5 Value co-creation of blockchain industry ecosystem = L2 × 0.5 + L1 × 0.6;

A6 User demand = L1 × 0.1 + A9 × 0.1;

A7 The added value of blockchain industry = L3 × 0.2;

A8 Platform attraction = R4^0.5;

A9 Service quality = R4^0.5;

A10 System structural upgrade = A5 × 0.2;

In the above equation, L1, L2 and L3 are state variables; Ri (i = 1, 2, 3, 4, 5) is the rate variable; Ai (i = 1, 2, …, 9, 10) represents auxiliary variables. For the constants, we set the initial values of C1 (Contract coordination), C2 (Contract control) and C3 (Contract adaptation) to 0.3. As the blockchain industry ecosystem is based on the blockchain technology, the most subversive feature of blockchain is the establishment of credit mechanism [2,3,7]. And the mutual trust has become the basis of cooperation among members of the system. Therefore, we set the initial values of C4 (Calculation trust) and C5 (Relationship trust) in trust governance to 0.4 respectively.

4. Simulation and Sensitivity Analysis

4.1. Simulation Analysis

In this paper, the system dynamics analysis software Vensim PLE is used to perform simulation analysis. According to the general value co-creation process, we set the system simulation time to 60 months, time step to 1 and units for month. The five constants—C1 (contract coordination), C2 (contract control), C3 (contract adaptation), C4 (calculation trust), and C5 (relationship trust)—take the value interval of (0, 1). The operational results of the simulation are shown in Figure 5.

The simulation results show that in the course of the simulation operation, the number of blockchain enterprises, the resource innovation stock and the industrial economic value both show an increasing trend, and the marginal effect increases progressively. Then there is a certain lag in the growth of resource innovation stock and economic value of the blockchain industry ecosystem. Referring to ‘The white paper on the development of Chinese blockchain enterprises of 2020–2021’ and ‘The white paper of blockchain (2020)’, the number of blockchain enterprises in the system simulation graph basically conforms with the actual development of the blockchain industry ecosystem. In simulation results, the changes of resource innovation stock over time are basically consistent with the trend of the number of blockchain patents in recent five years, showing an obviously increasing trend. These show that the blockchain industry of China is in an upward period, capital and entrepreneurs continue to enter, and the number of enterprises and innovation achievements are increasing rapidly, which bring about the improvement of the economic value of the blockchain industry.

The system dynamics model shows that value co-creation affected by contract governance and trust governance to some extent has effectiveness and reasonableness, and a sensitivity analysis of this model can be further performed.

4.2. Analysis of Simulation Results

To ensure robustness and comprehensiveness, the changes in the amount of value co-creation and resource innovation stock are considered in an integrated manner in this paper. To analyze the effect of governance mechanisms on value co-creation of the blockchain industry ecosystem, the numerical values of contract governance and trust governance are adjusted in this study to explore the effects of a single governance mechanism change on the amount of value co-creation and on the resource innovation stock.

4.2.1. Sensitivity Analysis of Contract Governance

The numerical value of trust governance (relationship trust and calculation trust) is maintained at 0.4, and the numerical value of contract governance (contract coordination, contract control, and contract adaptation) is adjusted sequentially from 0.3 to 0.4, 0.5, 0.6, 0.7 and 0.8 to obtain six schemes. The corresponding simulation results are shown in Figure 6. Figure 6a,b respectively show the impact of contract governance on value co-creation and resource innovation of blockchain industry ecosystem.

It can be seen that as contract governance gradually increases, the amount of value co-creation and the resource innovation stock also increase, which shows that the contract governance is beneficial for improving the resource innovation and value co-creation, and making the value co-creation process of the blockchain industry ecosystem is faster and more efficient. The establishment of a common behavioral norms in ecosystem through contract governance not only reduces the concern about opportunism and uncertainly, but also further strengthens members’ support for the system and improves the degree of resource sharing, which also shows that the contract governance is an essential framework in the process of value co-creation of the blockchain industry ecosystem [33,34]. Therefore, it can be concluded that contract governance has a positive effect on value co-creation and resource innovation of the blockchain industry ecosystem.

4.2.2. Sensitivity Analysis of Trust Governance

The numerical value of contract governance is maintained at 0.3, and the numerical value of trust governance (relationship trust and calculation trust) is adjusted sequentially from 0.4 to 0.5, 0.6, 0.7, 0.8 and 0.9 to obtain six schemes. The simulation results are shown in the Figure 7. Figure 7a,b respectively show the impact of trust governance on value co-creation and resource innovation of blockchain industry ecosystem. It can be seen that the resource innovation stock and the value co-creation of the blockchain industry ecosystem also increase as trust governance gradually increases, indicating that a good trust relationship not only creates a good atmosphere for the development of resource innovation activities, but also the increase of resource sharing in the process of interaction brings more innovation opportunities and promotes the resource innovation. At the same time, with the gradual increase of value co-creation of ecosystem, it also shows that trust governance can effectively improve the value co-creation of the blockchain industry ecosystem. Therefore, it can be concluded that trust governance has a positive effect on value co-creation and resource innovation of the blockchain industry ecosystem.

At the same time, to perform a comparative analysis of sensitivity of contract governance and trust governance on resource innovation stock and value co-creation, the specific numerical values of these two variables at 10, 20, 30, 40, 50 and 60 months are listed in this paper, as shown in

Table 2. Comparison of the sensitivity of contract governance and trust governance on the value co-creation.

Adjusted Variables	The Numerical Value	Months
		10	20	30	40	50	60
Trust Governance	0.4	33.15	226.6	1112	4641	17,720	64,339
	0.5	33.97	239.7	1220	5304	21,207	80,944
	0.6	34.99	256.7	1366	6254	26,459	107,349
	0.7	36.25	278.6	1565	7611	34,441	150,171
	0.8	37.75	306.4	1832	9568	46,800	221,677
	0.9	39.54	341.5	2194	12,430	66,416	345,349
Contract Governance	0.3	33.15	226.6	1112	4641	17,720	64,339
	0.4	33.43	231.0	1147	4854	18,825	69,511
	0.5	33.89	238.3	1208	5230	20,805	78,987
	0.6	34.59	249.7	1305	5847	24,172	95,650
	0.7	35.60	266.7	1454	6841	29,841	125,104
	0.8	36.98	291.2	1682	8446	39,583	179,169

and

Table 3. Comparison of the sensitivity of contract governance and trust governance on the resource innovation stock.

Adjusted Variables	The Numerical Value	Months
		10	20	30	40	50	60
Trust Governance	0.4	16.45	94.02	412.9	1591	5742	20,064
	0.5	17.43	106.0	494.3	2026	7785	28,957
	0.6	18.67	121.8	608.1	2672	11,017	43,994
	0.7	20.20	142.4	766.2	3634	16,198	70,015
	0.8	22.04	169.0	985.9	5082	24,677	116,428
	0.9	24.24	203.2	1293.5	7296	38,904	202,086
Contract Governance	0.3	16.45	94.02	412.9	1591	5742	20,064
	0.4	16.78	97.96	439.3	1730	6379	22,777
	0.5	17.33	104.7	485.2	1976	7544	27,880
	0.6	18.18	115.2	559.7	2392	9587	37,209
	0.7	19.39	131.0	677.1	3082	13,174	54,562
	0.8	21.08	154.2	861.0	4242	19,660	88,441

. It can be seen that for every 0.1 increase, the changes of resource innovation stock and value co-creation brought by contract governance is far less than that of trust governance. This also shows that the value co-creation activities can be more effective on the basis of trust governance. When the contract is incomplete, trust governance can help to improve the contract and reduce the possible risks in the process of interaction [36]. A cooperative relationship with good trust is healthier and more sustainable than that maintained solely by contract.

4.2.3. Sensitivity Analysis of Co-Existence Effect of Contract Governance and Trust Governance

The numerical value of contract governance (contract coordination, contract control, and contract adaptation) is adjusted sequentially from 0.3 to 0.4, 0.5, 0.6, 0.7 and 0.8, and the trust governance is adjusted correspondingly from 0.4 to 0.5, 0.6, 0.7, 0.8 and 0.9, and six schemes are obtained. The simulation results are shown in the Figure 8. Figure 8a,b respectively show the co-existence effect of contract governance and trust governance on value co-creation and resource innovation of blockchain industry ecosystem.

It can be found from Figure 8 that with the gradual increase of contract governance (contract control, contract coordination, contract adaptation) and trust governance (relationship trust and calculation trust), the resource innovation stock increase gradually, indicating that the co-existence effect of trust governance and contract governance will promote the resource innovation of the blockchain industry ecosystem. At the same time, the value co-creation of the blockchain industry ecosystem also increase significantly in the simulation results, which indicates that the co-existence effect of the two governance mechanisms can effectively improve the process of value co-creation of the blockchain industry ecosystem. In addition, by comparing the simulation results of Figure 6, Figure 7 and Figure 8 comprehensively, it can be seen that compared with the increasing of trust governance or contract governance alone, the resource innovation stock and value co-creation increase more obviously when improving the two governance mechanisms at the same time, indicating that there is a complementary and co-existence effect among contract governance and trust governance. Compared with only one governance mode, the co-existence effect of two can more actively and efficiently promote the value co-creation process of the blockchain industry ecosystem.

5. Conclusions and Implications

In the study, governance mechanisms and value co-creation of the blockchain industry ecosystem were used as the research content, and system dynamics was used as the research method to construct a causality graph and a system flow chart of value co-creation affected by the contract governance and trust governance of the blockchain industry ecosystem. Then, Vensim PLE software was used to perform simulation and sensitivity analysis on the system dynamics model. The study results show that: (1) Both contract governance and trust governance can positively affect the value co-creation of the blockchain industry ecosystem. The contract governance not only standardizes the behavior boundary, reduces the system risk, provides a good institutional environment for value co-creation of the blockchain industry ecosystem, but also enhances the transparency of value interaction, making the resource innovation and value co-creation process between members fairer and more efficient. The trust among system members reduces the high-cost communication caused by friction and negotiation, establishes high-quality cooperative relations among members, makes the resource exchange and sharing more flexible and convenient, and improves the efficiency of resource innovation. Besides this, trust governance not only focuses on the establishment of relationship quality, but also looks for common interests through trust-based communication, so as to make the individual objectives consistent with the overall value objectives of the system, and then create value together. Therefore, the contract governance and the trust governance can improve value co-creation of the blockchain industry ecosystem. (2) Compared with contract governance, the trust governance has a more significant effect on the resource innovation and the value co-creation of the blockchain industry ecosystem. Contract governance has good constraints on opportunistic behavior in the system, but because of ‘the limited rationality’, it is difficult to predict all possible things in the future in advance, and it will also produce high costs in the process of signing, modifying and executing the contract. The trust governance can reduce the dependence on various contracts and supervision, and directly reduce the costs in the process of signing and supervision. At the same time, trust governance can establish a long-term and stable cooperative relationship among members, so that system members can be separated from contract formulation and devote more energy to resource innovation and value co-creation activities. Moreover, the higher trust promotes a good communication among members, which will make the value interaction and value co-creation process more efficient. Therefore, in terms of the efficiency of resource innovation and value co-creation, the positive effect of trust governance on the value co-creation of the blockchain industry ecosystem is more significant. (3) There is a co-existence effect between the contract governance and the trust governance. Contract governance is an explicit norm for opportunistic behavior. Trust governance can often bring ‘self-discipline’ of system members through communication and cooperation. There is a complementary relationship between the two, and the co-existence effect of the two governance mechanisms is greater than that of the single effect, that is, compared with only one governance mode, the co-existence effect of two can more actively and efficiently promote the value co-creation of the blockchain industry ecosystem.

These findings provide some theoretical contributions. First, we study the value co-creation behavior from the perspective of industrial ecosystem. The existing research on value co-creation is mostly limited to the value generated by the interaction between customers and enterprises, and the realization mechanism of value co-creation in the industrial ecosystem is not clear. The blockchain industry ecosystem is a dynamic organizational process interwoven with complex value networks [2,3,4]. We analyze the relationship between the participants in the blockchain industry ecosystem, and build a value co-creation model of the blockchain industry ecosystem including the value interaction process of the blockchain enterprises, the blockchain platform and users, which provides a reference for the value co-creation research in the industrial ecosystem. Second, our study focuses on the role of governance mechanism on the value co-creation of the blockchain industry ecosystem. The existing literature on the influencing factors of value co-creation is usually limited to a specific aspect (contract governance or relationship governance), and the research on the role of two governance mechanisms and their comprehensive is insufficient. In an integrated perspective of social exchange theory and transaction cost theory, we divide governance mechanism into contract governance and trust governance, thus analyze the role of governance mechanism in value co-creation in a more comprehensive and systematic way. In doing so, the research promotes the development of antecedent and/or contextual factors research of value co-creation of the blockchain industry ecosystem. Third, our finding proves that both contract governance and trust governance can promote the value co-creation process of the blockchain industry ecosystem, but they are not exclusive, and the co-existence effect is greater than the single effect. It shows that the differentiated and diversified governance mechanism of the blockchain industry ecosystem can promote value co-creation. Our research thereby promotes the research on causality in the process of value co-creation of industrial ecosystem and enriches governance theory to a certain extent. Finally, we use system dynamics approach to investigate the relationship between governance mechanism and value co-creation. It provides a new idea for the research of value co-creation in the blockchain industry ecosystem and contributes to better capture the complexity and dynamic nature of value co-creation process of industrial ecosystem.

This study provides the following implications on how to improve the value co-creation of the blockchain industry ecosystem from the perspective of governance mechanism. Firstly, from the perspective of policy makers, it is necessary to establish an effective governance mechanism for the blockchain industry ecosystem. For example, formulate clear and effective systems, rules and coordination procedures, reach consensus on the rights and obligations of all parties. At the same time, the supporting effect of different dimensions of contract governance on value co-creation should also be fully and reasonably utilized, such as formulating inspection and supervision methods and intellectual property protection measures in advance from the perspective of contract coordination. Secondly, from the perspective of stakeholders, a high-quality trust relationship should be established among the participants of the blockchain industry ecosystem. On the one hand, build a communication platform and keep it running smoothly, and build a communication mechanism for managers at all levels of the enterprise, so as to reduce obstacles to resource innovation, optimize resource innovation process and make value co-creation in the ecosystem more transparent. On the other hand, by increasing the informal contact between the system subjects, allowing the different cultures between different subjects to penetrate and integrate with each other, looking for partners with common value propositions and obtaining high-quality resources and information exchange, the system mutual trust atmosphere can be created, and the effectiveness of resource sharing and value creation in the industrial ecosystem will also be improved. Thirdly, the co-existence effect of contract governance and trust governance in the blockchain industry ecosystem should be fully considered. The contract governance with economic characteristics has low flexibility, and trust governance makes up for the deficiency of contract to a certain extent. Therefore, when the value proposition is clear, it is necessary to consider the interaction of the two governance mechanisms comprehensively and seek the best combination to maximize the value co-creation of the blockchain industry ecosystem.

This paper carries out its analysis in strict accordance with the research paradigm of system dynamics. However, there are still some limitations and we can expand on these in future research: First, the impact of governance mechanism on value co-creation of the blockchain industry ecosystem is a complex process. This study simplifies some variables in the model, and the value co-creation process is also simplified as the value interaction and creation between blockchain enterprises, blockchain platforms and users, so the construction of the more complex dynamic model in the process of value co-creation of industrial ecosystem needs to be further researched and discussed. Second, value co-creation of the industrial ecosystem is not only affected by the governance mechanism, but also by other factors such as industrial environment and industrial policy. This study only considers the effect of contract governance and trust governance on value co-creation of the blockchain industry ecosystem. The influence mechanism of value co-creation from the perspective of industrial ecosystem needs to be further studied. Third, as the blockchain industry ecosystem is still in the development stage, the ambiguity of the boundary of the blockchain industry itself also brings some difficulties to the construction of the system dynamics model. Therefore, with the development and improvement of the blockchain industry, the selection of the boundary and key factors of the value co-creation model in the ecosystem needs to be more comprehensive. Finally, future studies can enrich and improve relevant studies on the blockchain industry ecosystem by analyzing the formation mechanism, influence mechanism and evolution path of the blockchain industry ecosystem through grounded/case studies, empirical data and evolutionary games.