Why do manufacturers launch virtual NFT products? The role of aspirational inventory levels

Manufacturers may face risks when transitioning from producing traditional tangible products to intangible ones, such as virtual non-fungible tokens (NFTs), which differ significantly from manufacturers' conventional offerings. Few scholars have explored why manufacturers opt to launch virtual NFTs. Motivated by the behavioral theory of the firm, we hypothesized that firms with excess inventories are likely to engage in problemistic search strategies aimed at reducing surplus, thus using NFT launches as marketing tools to enhance the sales of physical products and increase inventory turnover. Conversely, firms with inventory levels below their targets may adopt NFTs through slack search approaches, leveraging this new technology as an innovation strategy to bolster inventory performance and maintain competitive advantages. We sampled 104 firm-level announcements regarding virtual NFT products launching from U.S.-listed manufacturing firms and tested our hypotheses. The findings indicated that manufacturers with inventory levels deviating from their aspirations, whether positively or negatively, tended to launch NFTs. Furthermore, environmental cues, such as strong public attention and intense peer pressure, significantly reinforced this tendency. This study enriches the operations management literature by bridging inventory management with technological adoption and elucidating how physical inventory conditions drive firms’ decisions to embrace emerging intangible NFT products.