The impact of logistics performance on exports, imports and foreign direct investment

Abstract

Logistics performance (LP) is strongly connected to trade and investment, and gains growing importance in describing the competitiveness of countries. Increasing world trade simultaneously requires continuous progress in logistics or transport technologies so that the performance of logistics infrastructure becomes a necessary condition for foreign investors to operate efficiently. The aim of this paper is to examine how LP contributes to trade and foreign direct investment (FDI). This question has been empirically analysed by performing a panel data analysis using secondary data on 20 Asian countries. Our results prove a statistically significant relationship between LP and trade as well as FDI. So far, LP is rarely considered in explaining the attractiveness of countries as trading partners or as an investment target. The paper fills the gap in the literature by analysing the relationship between LP and trade as well as FDI.