The effect of blockchain technology on international trade in South Africa

Abstract

Blockchain technology has transformed international trade. Despite its beneficial potential in promoting international trade, blockchain technology is not a universal solution for all nations, as it affects global governance of trade activities. It is vital to know how blockchain technology affect international trade in developing nations. Therefore, the main objective of this study is to investigate the impact of blockchain technology on international trade in South Africa using quarterly time series data from 2013Q1 to 2024Q4. The autoregressive distributed lag (ARDL) and nonlinear autoregressive distributed lag (NARDL) approaches were used to analyse. The study found that blockchain technology positively affects international trade. This demonstrates that blockchain technology is effective in facilitating international trade transactions in South Africa. Regarding the nonlinear effects, the study reveals that positive change in blockchain technology has a positive impact on international trade, while negative change has a negative insignificant impact. Moreover, the study found that these effects are nonlinear in the long run. The study also found that inflation, FDI, exchange rate and GDP have a positive impact on international trade in South Africa. This study recommends that policymakers should promote the implementation of blockchain technology in international trade by creating supportive regulatory policies and investments in blockchain infrastructure. The implementation of supportive regulatory policies and investment in blockchain infrastructure could improve the level of South African international trade. The major contribution of this study was to provide a data-driven empirical analysis on the impact of blockchain technology on international trade at the country-specific level.