Logistics costs and competitiveness: measurement and trade policy applications

Ben Shepherd

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the issue of measuring logistics costs from an applied trade policy research perspective, as well as identifying logistics-intensive sectors. It focuses on currently available data at the macro- and firm-levels. Data sources considered include national accounts, national input-output tables, the International Comparison Project, firm-level data, and production and trade data. Although current data exhibit a number of weaknesses compared with “custom” logistics costs data—notably in terms of sectoral definition—they nonetheless make it possible to conduct some preliminary empirical analysis that can inform future measurement efforts. First, the paper finds that there is little systematic evidence of a link between the size of the logistics sector and economic outcomes, such as trade openness. Second, the relationship between the size of the logistics sector and logistics performance is non-monotonic. Third, the size of the logistics sector only increases in per capita income up to a certain point, before the relationship turns negative. These findings suggest that measures of sectoral size—such as logistics costs relative to GDP—may be of limited use to researchers and policymakers because they do not have an unambiguous interpretation in terms of performance or economic outcomes. Fourth, however, direct indicators of price and performance are more clearly related to economic outcomes, and have a more straightforward relation with per capita income. The emphasis going forward should therefore be on compiling data that capture logistics performance most accurately, rather than sector size. Finally, the paper uses input-output data to identify logistics-intensive sectors, and finds suggestive evidence that improvements in logistics performance could lead to sectoral reallocations in favor of relatively heavy industries in developing countries, which is consistent with the goal of export diversification.

Keywords: Logistics; Trade policy; Data and measurement (search for similar items in EconPapers)
JEL-codes: F13 L90 (search for similar items in EconPapers)
Date: 2011-11-03
New Economics Papers: this item is included in nep-cse
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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