Logistics performance as a mediator of the relationship between trade facilitation and international trade: A mediation analysis

Abstract

Background: The development of services, infrastructure and logistics has contributed in reducing costs and delays in exchanges between countries, leading to a significant increase in global trade. Aims: To provide empirical evidence of the relationship between trade facilitation and international trade through logistics performance. Settings: We collected data every 2 years – 2010, 2012, 2014, 2016 and 2018 – over 8 years from 62 countries, including 33 lower-middle-income countries and 29 upper-middle-income countries. Methods: Structural equation modelling is used to analyse the structural relationships between measured variables and latent constructs. Results: Using mediation analysis, the results reveal a positive and statistically significant relationship between trade facilitation and international trade through logistics performance. Conclusion: The results draw the attention of policy makers that improved logistics performance facilitates the movement of goods and services between countries for both importers and exporters. Lower middle-income countries should encourage cooperation between the public and private sectors and focus their efforts on all aspects of the development of transport infrastructure services to improve the efficiency of international trade.