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Blockchain Technology and the Financial Market: An Empirical Analysis

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  • Evans, Olaniyi

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.

Suggested Citation

  • Evans, Olaniyi, 2018. "Blockchain Technology and the Financial Market: An Empirical Analysis," MPRA Paper 99212, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:99212
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    References listed on IDEAS

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    More about this item

    Keywords

    Blockchain technology; bitcoin; smart contracts; financial markets;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • F3 - International Economics - - International Finance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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