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The value of Blockchain technology implementation in international trades under demand volatility risk

Author

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  • Jiho Yoon
  • Srinivas Talluri
  • Hakan Yildiz
  • Chwen Sheu

Abstract

The extant literature has conceptually argued that Blockchain technology can provide both financial and operational benefits to firms in international trades. However, no studies have systematically and analytically investigated the effectiveness of Blockchain. This study introduces analytical models that consider the implementation of Blockchain technology in international trades, to test whether the technology improves an exporting firm's performance under demand volatility risk. The simulation and numerical analysis results show that the reduced lead time and decreased ocean transport cost under Blockchain enable the exporting firm to increase shipment via the ocean, which reduces the quantity shipped via air. In addition, the reduced total unit cost for ocean and air transports leads the firm to effectively reserve spaces for air transport, which implies that Blockchain makes the firm more proactive while preparing a backup plan to more effectively and efficiently react to demand realisation. We conclude that Blockchain can be beneficial for firms facing considerable demand volatility in international trades, and that such effectiveness could be more effective for firms that prioritise minimising lost sales (by efficiently utilising ocean and effectively exploiting air) over minimising excess quantity shipped by ocean.

Suggested Citation

  • Jiho Yoon & Srinivas Talluri & Hakan Yildiz & Chwen Sheu, 2020. "The value of Blockchain technology implementation in international trades under demand volatility risk," International Journal of Production Research, Taylor & Francis Journals, vol. 58(7), pages 2163-2183, April.
    • Handle: RePEc:taf:tprsxx:v:58:y:2020:i:7:p:2163-2183
    DOI: 10.1080/00207543.2019.1693651
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    Cited by:

    1. Vincenzo Varriale & Antonello Cammarano & Francesca Michelino & Mauro Caputo, 2021. "Sustainable Supply Chains with Blockchain, IoT and RFID: A Simulation on Order Management," Sustainability, MDPI, vol. 13(11), pages 1-23, June.
    2. Iskender Peker & Ilker Murat AR & Ismail Erol & Cory Searcy, 2023. "Leveraging blockchain in response to a pandemic through disaster risk management: an IF-MCDM framework," Operations Management Research, Springer, vol. 16(2), pages 642-667, June.
    3. Chuangneng Cai & Xiancheng Hao & Kui Wang & Xuebing Dong, 2023. "The Impact of Perceived Benefits on Blockchain Adoption in Supply Chain Management," Sustainability, MDPI, vol. 15(8), pages 1-24, April.
    4. Niu, Baozhuang & Mu, Zihao & Cao, Bin & Gao, Jie, 2021. "Should multinational firms implement blockchain to provide quality verification?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    5. Amin Vafadarnikjoo & Hadi Badri Ahmadi & James J. H. Liou & Tiago Botelho & Konstantinos Chalvatzis, 2023. "Analyzing blockchain adoption barriers in manufacturing supply chains by the neutrosophic analytic hierarchy process," Annals of Operations Research, Springer, vol. 327(1), pages 129-156, August.
    6. Jain, Geetika & Kamble, Sachin S. & Ndubisi, Nelson Oly & Shrivastava, Archana & Belhadi, Amine & Venkatesh, Mani, 2022. "Antecedents of Blockchain-Enabled E-commerce Platforms (BEEP) adoption by customers – A study of second-hand small and medium apparel retailers," Journal of Business Research, Elsevier, vol. 149(C), pages 576-588.
    7. Tiwari, Sunil & Sharma, Pankaj & Choi, Tsan-Ming & Lim, Andrew, 2023. "Blockchain and third-party logistics for global supply chain operations: Stakeholders’ perspectives and decision roadmap," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    8. Antonello Cammarano & Vincenzo Varriale & Francesca Michelino & Mauro Caputo, 2023. "Blockchain as enabling factor for implementing RFID and IoT technologies in VMI: a simulation on the Parmigiano Reggiano supply chain," Operations Management Research, Springer, vol. 16(2), pages 726-754, June.
    9. Choi, Tsan-Ming & Siqin, Tana, 2022. "Blockchain in logistics and production from Blockchain 1.0 to Blockchain 5.0: An intra-inter-organizational framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
    10. He, Chao & Tan, Chunqiao & Ip, W.H. & Wu, C.H., 2023. "Combating counterfeits with the Blockchain-technology-supported platform under government enforcement," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    11. Zhang, Tianyu & Dong, Peiwu & Chen, Xiangfeng & Gong, Yu, 2023. "The impacts of blockchain adoption on a dual-channel supply chain with risk-averse members," Omega, Elsevier, vol. 114(C).
    12. Xu, Xiaoping & He, Ping & Zhou, Li & Cheng, T.C.E., 2023. "Coordination of a platform-based supply chain in the marketplace or reselling mode considering cross-channel effect and blockchain technology," European Journal of Operational Research, Elsevier, vol. 309(1), pages 170-187.
    13. Min-Ju Song & Young-Joon Seo & Hee-Yong Lee, 2023. "The dynamic relationship between industrialization, urbanization, CO2 emissions, and transportation modes in Korea: empirical evidence from maritime and air transport," Transportation, Springer, vol. 50(6), pages 2111-2137, December.
    14. Qingyu Zhang & Salman Khan & Safeer Ullah Khan & Ikram Ullah Khan, 2023. "Understanding Blockchain Technology Adoption in Operation and Supply Chain Management of Pakistan: Extending UTAUT Model With Technology Readiness, Technology Affinity and Trust," SAGE Open, , vol. 13(4), pages 21582440231, October.
    15. Nazir Ullah & Waleed S. Alnumay & Waleed Mugahed Al-Rahmi & Ahmed Ibrahim Alzahrani & Hosam Al-Samarraie, 2020. "Modeling Cost Saving and Innovativeness for Blockchain Technology Adoption by Energy Management," Energies, MDPI, vol. 13(18), pages 1-22, September.
    16. Jianhua Zhu & Taiwen Feng & Ying Lu & Wenbo Jiang, 2024. "Using blockchain or not? A focal firm's blockchain strategy in the context of carbon emission reduction technology innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3505-3531, May.
    17. Xiaoli Guo & Weili Xia & Taiwen Feng & Jianyu Tan & Fenggang Xian, 2024. "Blockchain technology adoption and sustainable supply chain finance: The perspective of information processing theory," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3614-3632, July.
    18. Kihyung Kim & Li Zhao, 2021. "Filtering Facepiece Respirator Supply Chain Management Framework in a Disaster Such as COVID-19," Societies, MDPI, vol. 11(4), pages 1-15, November.

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