Global Logistics Indicators, Supply Chain Metrics, and Bilateral Trade Patterns

By Warren H. Hausman, Hau L. Lee, U. Subramanian. 2005

180 citations recorded by the source corpus.

Past research into the determinants of international trade highlighted the importance of the basic spatial gravity model augmented by additional variables representing sources of friction. Studies modeled many sources of friction using various proxies, including indices based on expert judgment in some cases. This paper focuses on logistics friction and draws on a data set recently compiled by the World Bank with specific quantitative metrics of logistics performance in terms of time, cost, and variability in time. It finds that the new variables that relate directly to logistics performance have a statistically significant relationship with the level of bilateral trade. It also finds that a single logistics index can capture virtually all of the explanatory power of multiple logistics indicators. The findings should spur public and private agencies that have direct or indirect power over logistics performance to focus attention on reducing sources of friction so as to improve their country's ability to compete in today's global economy. Moreover, since the logistics metrics are directly related to operational performance, countries can use these metrics to target actions to improve logistics and monitor their progress.

Subfields: Economics and Econometrics, Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/7927a51425748f5d0ec60eae5b2fbc14b537529a

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In Economics and Econometrics

1. R. Puertas
2. L. Marti
3. Leandro García
4. Ben Shepherd
5. Patricia Sourdin
6. John S. Wilson
7. J. Korinek

In Management Information Systems

1. R. Puertas
2. L. Marti
3. Leandro García
4. Patricia Sourdin
5. J. Korinek

In Strategy and Management

1. R. Puertas
2. L. Marti
3. Leandro García
4. Patricia Sourdin
5. Ben Shepherd
6. John S. Wilson
7. J. Korinek

Citations in the corpus

• The importance of the Logistics Performance Index in international trade (2014, methodology): “In contrast, inefficient logistics results in higher costs in terms of time and money, adversely affecting both countries and companies as well as reducing turnover as demonstrated by Hausman et al. (2005).”
• To What Extent Are High-Quality Logistics Services Trade Facilitating? (2011, methodology): “Hausman et al. (2005) using both a composite measure of logistics performance quality and an early version of logistics data compiled by the World Bank, investigate the role of logistics cost, time and variability in time, and the complexity of export procedures on bilateral trade flows for 2005.”
• Trade facilitation in ASEAN member countries: Measuring progress and assessing priorities (2008, background): “One starting point for this line of policy research might be the World Bank’s Logistics Performance Index (e.g., Hausman et al., 2005).”
• Aid-for-trade facilitation (2009, unknown): “In addition, see Hausman et al. (2005).”