IDEAS home Printed from https://ideas.repec.org/p/grz/wpaper/2024-13.html
   My bibliography  Save this paper

Estimating the effects of logistics performance on trade: Evidence from different gravity model approaches

Author

Listed:
  • Filip Bugarcic

    (University of Kragujevac, Serbia)

  • Joern Kleinert

    (University of Graz, Austria)

Abstract

This paper examines logistics performance's effects on international trade. A country's logistics' capacity is measured by the Logistics Performance Index (LPI), compiled by the World Bank, which gives comparable country-level data for 166 countries in six waves. We use the LPI in different gravity model approaches comparing the results from relative gravity, fixed effects models as OLS and Poisson regressions, and the HMR two-stage procedure which specifies a probit estimation in the first stage and non-linear augmented gravity in the second. We construct a bilateral trade dataset with 28,020 bilateral trade relationships from CEPIIs trade database. In addition, we show and compare the effects for different country groups. The results of all used approaches indicate sizable and significant positive effects of logistics performance on international trade and in particular export activities. The findings give relevant policy implications and stress the need to improve the logistics system and associated performance to encourage exports.

Suggested Citation

  • Filip Bugarcic & Joern Kleinert, 2024. "Estimating the effects of logistics performance on trade: Evidence from different gravity model approaches," Graz Economics Papers 2024-13, University of Graz, Department of Economics.
    • Handle: RePEc:grz:wpaper:2024-13
    as

    Download full text from publisher

    File URL: https://unipub.uni-graz.at/obvugrveroeff/download/pdf/9891200?originalFilename=true
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Luisa Mart𓐊Author-X-Name-First: Luisa & Leandro Garc𨀍, 2014. "The importance of the Logistics Performance Index in international trade," Applied Economics, Taylor & Francis Journals, vol. 46(24), pages 2982-2992, August.
    2. Rosa Puertas & Luisa Martí & Leandro García, 2014. "Logistics performance and export competitiveness: European experience," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(3), pages 467-480, August.
    3. Fally, Thibault, 2015. "Structural gravity and fixed effects," Journal of International Economics, Elsevier, vol. 97(1), pages 76-85.
    4. Önsel Ekici, Şule & Kabak, Özgür & Ülengin, Füsun, 2016. "Linking to compete: Logistics and global competitiveness interaction," Transport Policy, Elsevier, vol. 48(C), pages 117-128.
    5. Blyde, Juan & Molina, Danielken, 2015. "Logistic infrastructure and the international location of fragmented production," Journal of International Economics, Elsevier, vol. 95(2), pages 319-332.
    6. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 441-487.
    7. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    8. Jose Tongzon, 2007. "Determinants of Competitiveness in Logistics: Implications for the ASEAN Region," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 9(1), pages 67-83, March.
    9. Dilay Çelebi, 2019. "The role of logistics performance in promoting trade," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(3), pages 307-323, September.
    10. Russell Hillberry & Xiaohui Zhang, 2018. "Policy and performance in customs: Evaluating the trade facilitation agreement," Review of International Economics, Wiley Blackwell, vol. 26(2), pages 438-480, May.
    11. Javier Reyes & Rossitza Wooster & Stuart Shirrell, 2014. "Regional Trade Agreements and the Pattern of Trade: A Networks Approach," The World Economy, Wiley Blackwell, vol. 37(8), pages 1128-1151, August.
    12. Jesus Felipe & Utsav Kumar, 2012. "The Role of Trade Facilitation in Central Asia," Eastern European Economics, Taylor & Francis Journals, vol. 50(4), pages 5-20, July.
    13. Halaszovich, Tilo F. & Kinra, Aseem, 2020. "The impact of distance, national transportation systems and logistics performance on FDI and international trade patterns: Results from Asian global value chains," Transport Policy, Elsevier, vol. 98(C), pages 35-47.
    14. Brice Kamguia & Manuella Ndjakwa & Sosson Tadadjeu, 2023. "Does infrastructural development foster export upgrading in Africa?," African Development Review, African Development Bank, vol. 35(1), pages 79-94, March.
    15. Elliott, Dan & Bonsignori, Carlotta, 2019. "The influence of customs capabilities and express delivery on trade flows," Journal of Air Transport Management, Elsevier, vol. 74(C), pages 54-71.
    16. Petra Adelajda Zaninović & Vinko Zaninović & Helga Pavlić Skender, 2021. "The effects of logistics performance on international trade: EU15 vs CEMS," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 34(1), pages 1566-1582, January.
    17. Maddalena Conte & Pierre Cotterlaz & Thierry Mayer, 2022. "The CEPII Gravity Database," Working Papers 2022-05, CEPII research center.
    18. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    19. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    20. Jane Korinek & Patricia Sourdin, 2011. "To What Extent Are High-Quality Logistics Services Trade Facilitating?," OECD Trade Policy Papers 108, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mamta Kumari & Nalin Bharti, 2021. "Trade and logistics performance: does country size matter?," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(3), pages 401-423, September.
    2. Anderson, James E. & Borchert, Ingo & Mattoo, Aaditya & Yotov, Yoto V., 2018. "Dark costs, missing data: Shedding some light on services trade," European Economic Review, Elsevier, vol. 105(C), pages 193-214.
    3. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    4. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Fitting the Gravity Model when Zero Trade Flows are Frequent: a Comparison of Estimation Techniques using Africa's Trade Data," GlobalFood Discussion Papers 230588, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    5. Hanna Adam & Mario Larch & Jordi Paniagua, 2023. "Spain, Split and Talk: Quantifying Regional Independence," CESifo Working Paper Series 10742, CESifo.
    6. Benedikt Heid & Mario Larch & Yoto V. Yotov, 2021. "Estimating the effects of non‐discriminatory trade policies within structural gravity models," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 376-409, February.
    7. Bailey, Michael & Gupta, Abhinav & Hillenbrand, Sebastian & Kuchler, Theresa & Richmond, Robert & Stroebel, Johannes, 2021. "International trade and social connectedness," Journal of International Economics, Elsevier, vol. 129(C).
    8. repec:dau:papers:123456789/7446 is not listed on IDEAS
    9. repec:hal:wpspec:info:hdl:2441/dambferfb7dfprc9m01g1j1k2 is not listed on IDEAS
    10. Duc Bao Nguyen & Anne‐Gaël Vaubourg, 2021. "Financial intermediation, trade agreements and international trade," The World Economy, Wiley Blackwell, vol. 44(3), pages 788-817, March.
    11. repec:hal:spmain:info:hdl:2441/dambferfb7dfprc9m01g1j1k2 is not listed on IDEAS
    12. Thomas Orliac, 2012. "The economics of trade facilitation [L'économie de la facilitation des échanges]," SciencePo Working papers Main tel-03681980, HAL.
    13. repec:spo:wpecon:info:hdl:2441/dambferfb7dfprc9m01g1j1k2 is not listed on IDEAS
    14. Martin Grančay & Nóra Grančay & Jana Drutarovská & Ladislav Mura, 2015. "Gravitačný model zahraničného obchodu českej a slovenskej republiky 1995-2012: ako sa zmenili determinanty obchodu? [Gravity Model of Trade of the Czech and Slovak Republics 1995-2012: How Have Det," Politická ekonomie, Prague University of Economics and Business, vol. 2015(6), pages 759-777.
    15. repec:dau:papers:123456789/7448 is not listed on IDEAS
    16. Antoine Gervais, 2018. "Estimating the impact of country‐level policy restrictions on services trade," Review of International Economics, Wiley Blackwell, vol. 26(4), pages 743-767, September.
    17. Marie Daumal & Soledad Zignago, 2010. "Measure and determinants of border effects of Brazilian states," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 735-758, November.
    18. Getachew Magnar Kitila & Fuzhong Chen, 2021. "Multilateral Trade Resistance, International Competitiveness and African International Exports: A Network Perspective," International Journal of Science and Business, IJSAB International, vol. 5(10), pages 111-126.
    19. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596.
    20. Thomas Steinwachs, 2019. "Geography Matters: Spatial Dimensions of Trade, Migration and Growth," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 81.
    21. Hinz, Julian, 2017. "The view from space: Theory-based time-varying distances in the gravity model," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168270, Verein für Socialpolitik / German Economic Association.
    22. Bengt Söderlund & Patrik Tingvall, 2014. "Dynamic effects of institutions on firm-level exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 277-308, May.
    23. repec:spo:wpmain:info:hdl:2441/dambferfb7dfprc9m01g1j1k2 is not listed on IDEAS
    24. Magnus dos Reis & Sabino da Silva Pôrto & André Filipe Zago de Azevedo, 2021. "The impacts of the World Trade Organization on new members," The World Economy, Wiley Blackwell, vol. 44(7), pages 1944-1972, July.
    25. Yoto V. Yotov, 2022. "On the role of domestic trade flows for estimating the gravity model of trade," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 526-540, July.
    26. João Gilberto Mendes dos Reis & Pedro Sanches Amorim & José António Sarsfield Pereira Cabral & Rodrigo Carlo Toloi, 2020. "The Impact of Logistics Performance on Argentina, Brazil, and the US Soybean Exports from 2012 to 2018: A Gravity Model Approach," Agriculture, MDPI, vol. 10(8), pages 1-21, August.

    More about this item

    Keywords

    Trade logistics; Export; Gravity modeling; Relative gravity.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:grz:wpaper:2024-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefan Borsky (email available below). General contact details of provider: https://edirc.repec.org/data/vgrazat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.