Blockchain Technology and the Financial Market: An Empirical Analysis

Evans, Olaniyi (2018): Blockchain Technology and the Financial Market: An Empirical Analysis. Published in: Actual Problems of the Economy No. 211 (12 October 2019): pp. 82-101.

Abstract

This study investigates the relationship between blockchain technology and the financial market. The US and China are used as case studies for the 2008–2016 period using fully modified least square and Toda-Yamamoto causality technique. The estimates show that blockchain technology has positive and significant relationship with the financial market in the US and China. In other words, the higher the levels of blockchain innovation in these countries, the more developed the financial markets. This suggests that the presence of blockchain innovation in financial markets spurs financial development. Blockchain innovation is therefore a positive significant factor for well-developed financial markets. The findings also indicate that macroeconomic factors such as lagged financial development, GDP per capita, the growth rate of GDP, FDI and trade openness have significant and positive relationship with financial development in the two countries. Among the institutional variables, government effectiveness has significant and positive effects only in the US.

• Item Type: MPRA Paper
• Language: English
• Keywords: Blockchain technology; bitcoin; smart contracts; financial markets
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; F - International Economics > F3 - International Finance; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

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