A transaction cost perspective on blockchain governance in global value chains

Abstract

Copyright © 2022 The Authors. This study advances theoretical insights into blockchain adoption in the context of global value chains from a transaction cost theory perspective. The research has adopted an exploratory qualitative approach using the Netnography method to scrutinize the case of TradeLens—a thriving blockchain-enabled ecosystem that Maersk and IBM jointly developed. This study applies textual and audiovisual data from company websites and social media. Our findings indicate blockchain technology's salient and strategic relevance in streamlining business processes, improving efficiency, enhancing visibility, transparency, and traceability for value creation in the global value chains. This investigation supports the notion that blockchain, as a disruptor, will transform global trade with the digital tools to share real-time information and collaborate security to reduce search and information cost, policing and enforcement cost in global economic transactions and administrative friction in trade. In contrast, the bargaining cost will increase if the information for the transaction is hard to verify where human actor intervention will be required, implying relatively higher designing costs in codifying the agreements in smart contracts.