Exploring country-level logistics infrastructure, market potential, trade exports amongst developed and emerging markets

Background: This study critically examines the influence of national logistics infrastructure and market potential indicators and customs duty as a proxy for trade performance using an integrated measurement framework. Objectives: The aim of this study was to compute the relative data envelopment analysis (DEA) efficiency for a set of developed and emerging market (EM) countries using widely accepted trade and logistics infrastructure components. Global logistics remains an integral component of macroeconomics when studying the potential of developed and EM growth. The study investigated the relative and relevant trade, logistics infrastructure and market potential performance. Method: The methodological approach adopted in this study combined DEA efficiency and ordinary least squares (OLS) regressions for country-level comparisons. We incorporated trade export and import ratios for common sectors as trade performance proxies. Two important hypotheses were proposed in the study. Results: We showed several important results. Firstly, there was clear evidence that EM countries were just as efficient as developed markets despite the scale or size differences between these country groups. Secondly, efficient countries seemed to produce better trade performance outcomes. Thirdly, relative to predicting customs duty revenues, reliable infrastructure mattered. Conclusion: The evidence from our DEA and OLS analyses conducted suggests important relationships between logistics infrastructure, market potential and trade outcomes performance (as measured by customs duties and import and export ratios). Our data on 89 countries result in guidance for infrastructure improvement areas and linkages between market potential components and import and export ratios across key industry sectors.