Blockchain Technology and the Financial Market: An Empirical Analysis

Olaniyi Evans

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Blockchain technology; bitcoin; smart contracts; financial markets (search for similar items in EconPapers)
JEL-codes: E2 F3 O3 (search for similar items in EconPapers)
Date: 2018-06-18
New Economics Papers: this item is included in nep-fdg and nep-pay
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Citations: View citations in EconPapers (1)

Published in Actual Problems of the Economy 211 (2019): pp. 82-101

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:99212

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