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Adoption of Blockchain Technology in the Australian Grains Trade: An Assessment of Potential Economic Effects

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  • Don Gunasekera
  • Ernesto Valenzuela

Abstract

Recent analysis of Blockchain use has highlighted considerable potential productivity gains arising from lower transaction costs between buyers and sellers of goods. This has been shown by recent examples of Blockchain use in the Australian grains sector. In this paper, we have further developed and quantified this concept of productivity gain by undertaking several illustrative scenarios using a general equilibrium model of the global economy. Our analysis indicates that an assumed modest growth (five per cent) in productivity due to Blockchain use in the grains sector could raise output by eight per cent over the medium term. If this is accompanied by Blockchain use in the Australian finance sector, grains output could reach ten per cent. This reflects the effect of reduction in transaction costs due to the use of Blockchain technology as a “distributed ledger technology” in grain trading. Further, it is anticipated that the wider effects of Blockchain‐driven productivity enhancement of the Australian finance sector could contribute to approximately 2.5 per cent increase in GDP in the medium term, relative to what would otherwise be.

Suggested Citation

  • Don Gunasekera & Ernesto Valenzuela, 2020. "Adoption of Blockchain Technology in the Australian Grains Trade: An Assessment of Potential Economic Effects," Economic Papers, The Economic Society of Australia, vol. 39(2), pages 152-161, June.
    • Handle: RePEc:bla:econpa:v:39:y:2020:i:2:p:152-161
    DOI: 10.1111/1759-3441.12274
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    References listed on IDEAS

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    1. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-325, May.
    2. Ernesto Valenzuela & Kym Anderson, 2011. "Projecting the World Economy to 2050: Agriculture in the Economy-wide GTAP Model," Centre for International Economic Studies Working Papers 2011-01, University of Adelaide, Centre for International Economic Studies.
    3. Gifford, K. & Cheng, J., 2016. "Implementation of real-time settlement for banks using decentralised ledger technology: policy and legal implications," Financial Stability Review, Banque de France, issue 20, pages 143-151, April.
    4. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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    Cited by:

    1. Lim, Jing Zhi & Toh, Mun-Heng & Xie, Taojun, 2022. "Impact of Digital Economy Agreements on ASEAN Development: Estimates from a CGE Model," Conference papers 333441, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Saleem Malik & Mehmood Chadhar & Savanid Vatanasakdakul & Madhu Chetty, 2021. "Factors Affecting the Organizational Adoption of Blockchain Technology: Extending the Technology–Organization–Environment (TOE) Framework in the Australian Context," Sustainability, MDPI, vol. 13(16), pages 1-33, August.
    3. Jamilya Nurgazina & Udsanee Pakdeetrakulwong & Thomas Moser & Gerald Reiner, 2021. "Distributed Ledger Technology Applications in Food Supply Chains: A Review of Challenges and Future Research Directions," Sustainability, MDPI, vol. 13(8), pages 1-26, April.
    4. Pandey, Vivekanand & Pant, Millie & Snasel, Vaclav, 2022. "Blockchain technology in food supply chains: Review and bibliometric analysis," Technology in Society, Elsevier, vol. 69(C).
    5. Anandika Sharma & Anupam Sharma & Tarunpreet Bhatia & Rohit Kumar Singh, 2023. "Blockchain enabled food supply chain management: A systematic literature review and bibliometric analysis," Operations Management Research, Springer, vol. 16(3), pages 1594-1618, September.
    6. Ashton de Silva & Mikayla Novak, 2020. "Introduction to the Special Section," Economic Papers, The Economic Society of Australia, vol. 39(2), pages 101-103, June.
    7. Peter Sasitharan Gandhi Maniam & Nirmal Acharya & Anne-Marie Sassenberg & Jeffrey Soar, 2024. "Determinants of Blockchain Technology Adoption in the Australian Agricultural Supply Chain: A Systematic Literature Review," Sustainability, MDPI, vol. 16(13), pages 1-22, July.

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