Catching-up effects in the logistics industry and the dynamic linkages with international trade and economic growth: empirical evidence from an international panel dataset

Authors

  • Ioannis Katrakylidis Aristotle University of Thessaloniki
  • Michael Madas University of Macedonia

DOI:

https://doi.org/10.17811/ebl.9.3.2020.197-205

Abstract


We analyze the dynamic linkages among Logistics, Trade and Economic Growth for a panel of 39 countries over the period 2007-2018. In particular, we investigate whether these countries exhibit the tendency to catch up, in terms of logistics performance, with the leader country, using methodologies of “convergence analysis” appropriate for the notions of stochastic convergence and β-convergence and perform Granger-causality tests among a catching up variable (the LPI of each country relative to the LPI of Germany), Trade Openness and economic growth. The findings reveal rather weak evidence of catching-up effects with Germany. As far as causality is concerned, trade and economic growth further enhance the global tendency in logistics performance to catch-up with the dominant Germany while convergence in logistics is found to directly support economic growth but not trade.

References

Arvis, J.F., Mustra, M., Panzer, J., Ojala. L. and Naula, T. (2007) Connecting to Compete 2007: Trade Logistics in the Global Economy, Washington, D.C., The World Bank.

Arvis, J.F., Mustra, M., Ojala, J., Shepherd, B. and Saslavsky, D. (2010) Connecting to Compete 2010: Trade Logistics in the Global Economy, Washington, D.C., The World Bank.

Arvis, J.F., Mustra, M., Ojala, J., Shepherd B. and Saslavsky, D. (2012) Connecting to Compete: Trade Logistics in the Global Economy, Washington, D.C., The World Bank.

Arvis, J.F., Saslavsky, D., Ojala, L., Shepherd, B., Busch and C., Raj, A. (2014) Connecting to Compete: Trade Logistics in the Global Economy - The Logistics Performance Index and Its Indicators, Washington, D.C., The World Bank.

Berndt, E.R. and Hansson, B. (1992) Measuring the contribution of public infrastructure capital in Sweden, Scandinavian Journal of Economics, 94, 151-168.

Breitung, J. (2000) The Local Power of Some Unit Root Tests for Panel Data, Advances in Econometrics 15, Nonstationary Panels, Panel Cointegration and Dynamic Panels, Amsterdam: JAI Press, 161-178.

Carlino, G. and Mills, L. (1993) Are U.S. Regional Incomes Converging? A Time Series Analysis, Journal of Monetary Economics 32: 335–346.

Choi, I. (2001) Unit root tests for panel data. Journal of International Money Finance, 20(2), 249-272

Dee, P. and Findlay, C. (2006) Trade Facilitation: What, Why, How, Where and When?, 3rd LAEBA Annual Meeting Seoul, South Korea.

Gani, A. (2017) The Logistics Performance Effect in International Trade, The Asian Journal of Shipping and Logistics, 33(4), 279-288.

Granger, C. W. J. (1969) Investigating Causal Relations by Econometric Models and Cross-spectral Methods, Econometrica. 37 (3): 424–438.

Hausman, W.H., Lee, H.L and Subramaniam, U. (2013) The impact of logistics performance on trade, Production and Operations Management, 22(2), 236-252.

Hoekman, B. and Nicita, A. (2011) Trade policy, trade costs, and developing country trade, World Development, 39, 2069-2079.

Im, K.S., Pesaran, M. and Shin, Y. 2(003) Testing for unit roots in heterogeneous panels, Journal of Econometrics, 115(1), 53-74.

Katrakylidis, I. and Madas, M. (2019) International Trade and Logistics: An Empirical Panel Investigation of the Dynamic Linkages between the Logistics and Trade and their Contribution to Economic Growth, International Journal of Economics and Business Administration (IJEBA), 3(4), 3-21.

Kessides, C. (1996) A review of infrastructure’s impact on economic development. In Batten, D., Karlsson, C. (Eds.), Infrastructure and the Complexity of Economic Development, Chapter 12, 213-230.

Lee, J.Y. and Rodrigue, J.P. (2006) Trade reorientation and its effects on regional port systems: the Korea–China link along the Yellow Sea Rim, Growth and Change, 37(4), 597-619.

Levin, A., Lin, C.F. and Chu, C.S.J. (2002) Unit root tests in panel data: Asymptotic and finite-sample properties, Journal of Econometrics, 108(1), 1-24.

Maddala, G.S. and Wu, S. (1999) A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test, Oxford Bulletin of Economics and Statistics, 61, 631-652.

Nguyen, H.O., and Tongzon, J. (2010) Causal nexus between the transport and logistics sector and trade: The case of Australia, Transport Policy, 17, 135-146.

Portugal-Perez, A. and Wilson, J.S. (2012) Export performance and trade facilitation reform: hard and soft infrastructure, World Development, 40, 1295-1307.

Rietveld, P, (1989) Infrastructure and regional development: A survey of multiregional economic models, The Annals of Regional Science, 23, 255-274.

Sala-i-Martin, X. (1996) The Classical Approach to Convergence Analysis, The Economic Journal 106, 1019– 1036.

Tomljanovich M, Vogelsang T (2002) Are U.S. regions converging? Using new econometric methods to examine old issues, Empirical Economics, 27, 49–62

Vasiliauskas, A.V. and Barysiene, J. (2008) An economic evaluation model of the logistics system based on container transportation, Transport, 23(4), 311-315.

Wilson, J., Mann, C. and Otsuki, T. (003) Trade facilitation and economic development, World Bank Policy Research Working Paper 2988. Washington.

Downloads

Published

2020-12-13

How to Cite

Katrakylidis, I., & Madas, M. (2020). Catching-up effects in the logistics industry and the dynamic linkages with international trade and economic growth: empirical evidence from an international panel dataset. Economics and Business Letters, 9(3), 197–205. https://doi.org/10.17811/ebl.9.3.2020.197-205