Share:


Could “digital gold” resist global supply chain pressure?

    Men Qin Affiliation
    ; Chi-Wei Su Affiliation
    ; Yunxu Wang Affiliation
    ; Nicoleta Mihaela Doran Affiliation

Abstract

Exploring the safe-haven characteristics of bitcoin from novel perspectives is crucial to diversify the investment and reap the benefits. This investigation employs bootstrap full-and sub-sample techniques to probe time-varying interrelation between global supply chain pressure (GSCP) and bitcoin price (BP), and further answer if “digital gold” could resist the strains of global supply chain. The empirical outcomes suggest that GSCP positively and negatively affects BP. The positive influence points out that high GSCP might boost the international bitcoin market, driving BP to rise, which indicates that “digital gold” could resist the pressures of global supply chain. But the negative effect of GSCP on BP could not support the above view, mainly affected by the weak purchasing power and more valuable assets, which is not consistent with the assumption of the inter-temporal capital asset pricing model (ICAPM). In turn, GSCP is adversely affected by BP, highlighting that the international bitcoin market may be viewed as a stress reliever for the global supply chain. Against a backdrop of the deteriorative Russia-Ukraine war and the intensifying global supply chain crisis, the above conclusions could bring significative lessons to the public, enterprises and related economies.


First published online 17 April 2023

Keyword : global supply chain, bitcoin price, digital gold, granger causal relation, sub-sample

How to Cite
Qin, M., Su, C.-W., Wang, Y., & Doran, N. M. (2024). Could “digital gold” resist global supply chain pressure?. Technological and Economic Development of Economy, 30(1), 1–21. https://doi.org/10.3846/tede.2023.18557
Published in Issue
Jan 4, 2024
Abstract Views
1058
PDF Downloads
668
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Adekoya, O.-B., Oliyide, J.-A., Yaya, O.-S., & Al-Faryan, M.-A.-S. (2022). Does oil connect differently with prominent assets during war? Analysis of intra-day data during the Russia-Ukraine saga. Resources Policy, 77, 102728. https://doi.org/10.1016/j.resourpol.2022.102728

Aggarwal, R., Akhigbe, A., & Mohanty, S.-K. (2012). Oil price shocks and transportation firm asset prices. Energy Economics, 34(5), 1370–1379. https://doi.org/10.1016/j.eneco.2012.05.001

Andrews, D.-W.-K. (1993). Tests for parameter instability and structural change with unknown change point. Econometrica, 61(4), 821–856. https://doi.org/10.2307/2951764

Andrews, D.-W.-K., & Ploberger, W. (1994). Optimal tests when a nuisance parameter is present only under the alternative. Econometrica, 62(6), 1383–1414. https://doi.org/10.2307/2951753

Balcilar, M., & Ozdemir, Z.-A. (2013). The export-output growth nexus in Japan: A bootstrap rolling window approach. Empirical Economics, 44, 639–660. https://doi.org/10.1007/s00181-012-0562-8

Balcilar, M., Ozdemir, Z.-A., & Arslanturk, Y. (2010). Economic growth and energy consumption causal nexus viewed through a bootstrap rolling window. Energy Economics, 32(6), 1398–1410. https://doi.org/10.1016/j.eneco.2010.05.015

Baur, D.-G., Hoang, L.-T., & Hossain, M.-Z. (2022). Is Bitcoin a hedge? How extreme volatility can destroy the hedge property. Finance Research Letters, 47, 102655. https://doi.org/10.1016/j.frl.2021.102655

Beckmann, J., Czudaj, R., & Pilbeam, K. (2015). Causality and volatility patterns between gold prices and exchange rates. The North American Journal of Economics and Finance, 34, 292–300. https://doi.org/10.1016/j.najef.2015.09.015

Benigno, G., Giovanni, J., Groen, J.-J.-J., & Noble, A.-I. (2022). A new barometer of global supply chain pressures. Federal Reserve Bank of New York. Liberty Street Economics.

Blanton, R.-G., & Apodaca, C. (2007). Economic globalization and violent civil conflict: Is openness a pathway to peace? Social Science Journal, 44(4), 599–619. https://doi.org/10.1016/j.soscij.2007.10.001

Blessley, M., & Mudambi, S.-M. (2022). A trade war and a pandemic: Disruption and resilience in the food bank supply chain. Industrial Marketing Management, 102, 58–73. https://doi.org/10.1016/j.indmarman.2022.01.002

Bonadio, B., Huo, Z., Levchenko, A.-A., & Pandalai-Nayar, N. (2021). Global supply chains in the pandemic. Journal of International Economics, 133, 103534. https://doi.org/10.1016/j.jinteco.2021.103534

Bouri, E., & Gupta, R. (2019). Predicting Bitcoin returns: Comparing the roles of newspaper- and internet search-based measures of uncertainty. Finance Research Letters, 38(4), 101398.

Bouri, E., Molnár, P., Azzi, G., Roubaud, D., & Hagfors, L.-I. (2017). On the hedge and safe haven properties of Bitcoin: Is it really more than a diversifier? Finance Research Letters, 20, 192–198. https://doi.org/10.1016/j.frl.2016.09.025

Brown, S.-P.-A. (2017). Natural gas vs. oil in U.S. transportation: Will prices confer an advantage to natural gas? Energy Policy, 110, 210–221. https://doi.org/10.1016/j.enpol.2017.08.018

Caldara, D., & Iacoviello, M. (2017). Measuring geopolitical risk (Working Paper). Board of Governors of the Federal Reserve System.

Cedillo-Campos, M.-G., Piña-Barcenas, J., Pérez-González, C.-M., & Mora-Vargas, J. (2022). How to measure and monitor the transportation infrastructure contribution to logistics value of supply chains? Transport Policy, 120, 120–129. https://doi.org/10.1016/j.tranpol.2022.03.001

Chan, W.-H., Le, M., & Wu, Y.-W. (2019). Holding Bitcoin longer: The dynamic hedging abilities of Bitcoin. The Quarterly Review of Economics and Finance, 71, 107–113. https://doi.org/10.1016/j.qref.2018.07.004

Chkili, W., Rejeb, A.-B., & Arfaoui, M. (2021). Does bitcoin provide hedge to Islamic stock markets for pre- and during COVID-19 outbreak? A comparative analysis with gold. Resources Policy, 74, 102407. https://doi.org/10.1016/j.resourpol.2021.102407

Choi, S., & Shin, J. (2022). Bitcoin: An inflation hedge but not a safe haven. Finance Research Letters, 46, 102379. https://doi.org/10.1016/j.frl.2021.102379

Cifarelli, G., & Paladino, G. (2010). Oil price dynamics and speculation: A multivariate financial approach. Energy Economics, 32(2), 363–372. https://doi.org/10.1016/j.eneco.2009.08.014

Cristea, M.-S., Pirtea, M.-G., Suciu, M.-C., & Noja, G.-G. (2022). Workforce participation, ageing, and economic welfare: New empirical evidence on complex patterns across the European Union. Complexity, 2022, 7313452. https://doi.org/10.1155/2022/7313452

Dyhrberg, A.-H. (2016). Bitcoin, gold and the dollar – A GARCH volatility analysis. Finance Research Letters, 16, 85–92. https://doi.org/10.1016/j.frl.2015.10.008

Ekinci, E., Mangla, S.-K., Kazancoglu, Y., Sarma, P.-R.-S., Sezer, M.-D., & Ozbiltekin-Pala, M. (2022). Resilience and complexity measurement for energy efficient global supply chains in disruptive events. Technological Forecasting and Social Change, 179, 121634. https://doi.org/10.1016/j.techfore.2022.121634

Elwell, C.-K., Murphy, M.-M., & Seitzinger, M.-V. (2013). Bitcoin: Questions, answers, and analysis of legal issues. Congressional Research Service.

Fasanya, I.-O., Oliyide, J.-A., Adekoya, O.-B., & Agbatogun, T. (2021). How does economic policy uncertainty connect with the dynamic spillovers between precious metals and bitcoin markets? Resources Policy, 72, 102077. https://doi.org/10.1016/j.resourpol.2021.102077

Feng, P.-P., Zhou, X.-Y., Zhang, D., Chen, Z.-B., & Wang, S.-Y. (2022). The impact of trade policy on global supply chain network equilibrium: A new perspective of product-market chain competition. Omega, 109, 102612. https://doi.org/10.1016/j.omega.2022.102612

Gamal, A., Abdel-Basset, M., & Chakrabortty, R.-K. (2022). Intelligent model for contemporary supply chain barriers in manufacturing sectors under the impact of the COVID-19 pandemic. Expert Systems with Applications, 205, 117711. https://doi.org/10.1016/j.eswa.2022.117711

Golan, M.-S., Jernegan, L.-H., & Linkov, I. (2020). Trends and applications of resilience analytics in supply chain modeling: Systematic literature review in the context of the COVID-19 pandemic. Environment Systems and Decisions, 40, 222–243. https://doi.org/10.1007/s10669-020-09777-w

Gozgor, G., Tiwari, A.-K., Demir, E., & Akron, S. (2019). The relationship between Bitcoin returns and trade policy uncertainty. Finance Research Letters, 29, 75–82. https://doi.org/10.1016/j.frl.2019.03.016

Hansen, B.-E. (1992). Tests for parameter instability in regressions with I(1) processes. Journal of Business & Economic Statistics, 10(3), 321–335. https://doi.org/10.1080/07350015.1992.10509908

Hasan, M.-B., Hassan, M.-K., Karim, Z.-A., & Rashid, M.-M. (2022). Exploring the hedge and safe haven properties of cryptocurrency in policy uncertainty. Finance Research Letters, 46, 102272. https://doi.org/10.1016/j.frl.2021.102272

Jomthanachai, S., Wong, W.-P., Soh, K.-L., & Lim, C.-P. (2022). A global trade supply chain vulnerability in COVID-19 pandemic: An assessment metric of risk and resilience-based efficiency of CoDEA method. Research in Transportation Economics, 93, 101166. https://doi.org/10.1016/j.retrec.2021.101166

Kliber, A., Marszałek, P., Musiałkowska, I., & Świerczyńska, K. (2019). Bitcoin: Safe haven, hedge or diversifier? Perception of bitcoin in the context of a country’s economic situation – A stochastic volatility approach. Physica A: Statistical Mechanics and its Applications, 524, 246–257. https://doi.org/10.1016/j.physa.2019.04.145

Li, Z.-Z., Tao, R., Su, C.-W., & Lobonţ, O.-R. (2019). Does Bitcoin bubble burst? Quality & Quantity, 53(1), 91–105. https://doi.org/10.1007/s11135-018-0728-3

Long, S.-B., Pei, H.-X., Tian, H., & Lang, K. (2021). Can both Bitcoin and gold serve as safe-haven assets? – A comparative analysis based on the NARDL model. International Review of Financial Analysis, 78, 101914. https://doi.org/10.1016/j.irfa.2021.101914

Luther, W.-J., & Salter, A.-W. (2017). Bitcoin and the bailout. The Quarterly Review of Economics and Finance, 66, 50–56. https://doi.org/10.1016/j.qref.2017.01.009

Mamun, M.-A., Uddin, G.-S., Suleman, M.-T., & Kang, S.-H. (2020). Geopolitical risk, uncertainty and Bitcoin investment. Physica A: Statistical Mechanics and its Applications, 540, 123107. https://doi.org/10.1016/j.physa.2019.123107

Matkovskyy, R., Jalan, A., & Dowling, M. (2020). Effects of economic policy uncertainty shocks on the interdependence between Bitcoin and traditional financial markets. The Quarterly Review of Economics and Finance, 77, 150–155. https://doi.org/10.1016/j.qref.2020.02.004

Nagurney, A. (2021). Optimization of supply chain networks with inclusion of labor: Applications to COVID-19 pandemic disruptions. International Journal of Production Economics, 235, 108080. https://doi.org/10.1016/j.ijpe.2021.108080

Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://Bitcoin.org/Bitcoin.pdf

Nyblom, J. (1989). Testing for the constancy of parameters over time. Journal of the American Statistical Association, 84(405), 223–230. https://doi.org/10.1080/01621459.1989.10478759

Pesaran, M.-H., & Timmermann, A. (2005). Small sample properties of forecasts from autoregressive models under structural breaks. Journal of Econometrics, 129(1–2), 183–217. https://doi.org/10.1016/j.jeconom.2004.09.007

Pirtea, M.-G., Noja, G.-G., Cristea, M., & Panait, M. (2021). Interplay between environmental, social and governance coordinates and the financial performance of agricultural companies. Agricultural Economics-Zemědělská Ekonomika, 67(12), 479–490. https://doi.org/10.17221/286/2021-AGRICECON

Qin, M., Su, C.-W., & Tao, R. (2021). BitCoin: A new basket for eggs? Economic Modelling, 94(C), 896–907. https://doi.org/10.1016/j.econmod.2020.02.031

Qin, M., Su, C.-W., Tao, R., & Umar, M. (2020a). Is factionalism a push for gold price? Resources Policy, 67, 101679. https://doi.org/10.1016/j.resourpol.2020.101679

Qin, M., Su, C.-W., Qi, X.-Z., & Hao, L.-N. (2020b). Should gold be stored in chaotic eras? Ekonomska Istrazivanja-Economic Research, 33(1), 224–242. https://doi.org/10.1080/1331677X.2019.1661789

Qin, M., Su, C.-W., Zhong, Y.-F., Song, Y.-R., & Lobonț, O.-R. (2022b). Sustainable finance and renewable energy: Promoters of carbon neutrality in the United States. Journal of Environmental Management, 324, 116390. https://doi.org/10.1016/j.jenvman.2022.116390

Qin, M., Wu, T., Tao, R., Su, C.-W., & Petru, S. (2022a). The inevitable role of bilateral relation: A fresh insight into the bitcoin market. Economic Research-Ekonomska Istraživanja, 35(1), 4260–4279. https://doi.org/10.1080/1331677X.2021.2013269

Shaikh, I. (2020). Policy uncertainty and bitcoin returns. Borsa Istanbul Review, 20(3), 257–268. https://doi.org/10.1016/j.bir.2020.02.003

Sharpe, W.-F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. Journal of Finance, 19(3), 425–442. https://doi.org/10.1111/j.1540-6261.1964.tb02865.x

Shukur, G., & Mantalos, P. (1997). Size and power of the RESET test as applied to systems of equations: A bootstrap approach (Working Paper). Department of Statistics, University of Lund.

Shukur, G., & Mantalos, P. (2000). A simple investigation of the Granger-causality test in integrated-cointegrated VAR systems. Journal of Applied Statistics, 27(8), 1021–1031. https://doi.org/10.1080/02664760050173346

Su, C.-W., Qin, M., Tao, R., & Moldovan, N.-C. (2021a). Is oil political? From the perspective of geopolitical risk. Defence and Peace Economics, 32(4), 451–467. https://doi.org/10.1080/10242694.2019.1708562

Su, C.-W., Qin, M., Tao, R., & Umar, M. (2020a). Does oil price really matter for the wage arrears in Russia? Energy, 208, 118350. https://doi.org/10.1016/j.energy.2020.118350

Su, C.-W., Qin, M., Tao, R., & Umar, M. (2020b). Financial implications of fourth industrial revolution: Can bitcoin improve prospects of energy investment? Technological Forecasting & Social Change, 158, 120178. https://doi.org/10.1016/j.techfore.2020.120178

Su, C.-W., Qin, M., Tao, R., Shao, X.-F., Albu, L.-L., & Umar, M. (2020c). Can Bitcoin hedge the risks of geopolitical events? Technological Forecasting & Social Change, 159, 120182. https://doi.org/10.1016/j.techfore.2020.120182

Su, C.-W., Qin, M., Tao, R., & Zhang, X.-Y. (2020d), Is the status of gold threatened by bitcoin? Economic Research-Ekonomska Istraživanja, 33(1), 420–437. https://doi.org/10.1080/1331677X.2020.1718524

Su, C.-W., Qin, M., Zhang, X.-L., Tao, R., & Umar, M. (2021b). Should Bitcoin be held under the U.S. partisan conflict? Technological and Economic Development of Economy, 27(3), 511–529. https://doi.org/10.3846/tede.2021.14058

Umar, M., Su, C.-W., Rizvi, S.-K.-A., & Shao, X.-F. (2021). Bitcoin: A safe haven asset and a winner amid political and economic uncertainties in the US? Technological Forecasting and Social Change, 167, 120680. https://doi.org/10.1016/j.techfore.2021.120680

Urquhart, A., & Zhang, H.-X. (2019). Is Bitcoin a hedge or safe haven for currencies? An intraday analysis. International Review of Financial Analysis, 63, 49–57. https://doi.org/10.1016/j.irfa.2019.02.009

Wang, G.-J., Xie, C., Wen, D.-Y., & Zhao, L.-F. (2019). When Bitcoin meets economic policy uncertainty (EPU): Measuring risk spillover effect from EPU to Bitcoin. Finance Research Letters, 31, 489–497. https://doi.org/10.1016/j.frl.2018.12.028

Wang, P.-J., Zhang, H.-W., Yang, C., & Guo, Y.-Q. (2021). Time and frequency dynamics of connectedness and hedging performance in global stock markets: Bitcoin versus conventional hedges. Research in International Business and Finance, 58, 101479. https://doi.org/10.1016/j.ribaf.2021.101479

Wang, Y.-H., Bouri, E., Fareed, Z., & Dai, Y.-H. (2022). Geopolitical risk and the systemic risk in the commodity markets under the war in Ukraine. Finance Research Letters, 49, 103066. https://doi.org/10.1016/j.frl.2022.103066

Wu, S., Tong, M., Yang, Z.-Y., & Derbali, A. (2019). Does gold or Bitcoin hedge economic policy uncertainty? Finance Research Letters, 31, 171–178. https://doi.org/10.1016/j.frl.2019.04.001

Xiong, J.-W., Liu, Q., & Zhao, L. (2019). A new method to verify Bitcoin bubbles: Based on the production cost. North American Journal of Economics and Finance, 51, 101095. https://doi.org/10.1016/j.najef.2019.101095

Yang, C., Wang, X.-Y., & Gao, W. (2022). Is Bitcoin a better hedging and safe-haven investment than traditional assets against currencies? Evidence from the time-frequency domain approach. The North American Journal of Economics and Finance, 62, 101747. https://doi.org/10.1016/j.najef.2022.101747

Yilmazkuday, H. (2022). COVID-19 and Monetary policy with zero bounds: A cross-country investigation. Finance Research Letters, 44, 102103. https://doi.org/10.1016/j.frl.2021.102103

Zhu, X.-H., Niu, Z.-B., Zhang, H.-W., Huang, J.-X., & Zuo, X.-G. (2022). Can gold and bitcoin hedge against the COVID-19 related news sentiment risk? New evidence from a NARDL approach. Resources Policy, 79, 103098. https://doi.org/10.1016/j.resourpol.2022.103098