An analysis of explanatory factors of logistics performance of a country
Author:Conf. univ. dr. Basarab Gogoneata
JEL:L81; L92; O11; O29
DOI:
Keywords:logistics performance; services; economic growth
Abstract:
The paper uses standard econometric techniques and the Logistics
Performance Index calculated by The World Bank for evaluating the impact of
several key macroeconomic variables on the quality of the logistics sector from 42
countries and regions. The regression results and the graphs have revealed that
there is a strong relationship between the development of the services sector and
the logistics performance of a country. Services are a major source of sustainable
economic development, but they are very sensitive to the quality of the
infrastructure and the functioning of institutions. Another finding is that many
economies where a significant part of value added is generated in industrial
activities tend to have high growth rates and lower logistics performance. Many of
these countries are located in Central and Eastern Europe and their economic
expansion was mainly supported by foreign direct investments in industrial sites
and real estate developments. Since these businesses are cyclical there is a high risk
of an economic downturn. These countries, particularly Romania, should rapidly
improve their trade and transport facilitation framework, i.e., logistics performance.
Such measures will allow the emergence of a robust service sector able to make the
economic development sustainable by cushioning the cyclical shocks from the
industrial side of economy.