Trade Facilitation and Logistics: a Management Interface for Government and Business

Abstract

Logistics performance enhances international trade and productivity as an essential component of trade facilitation in countries. Despite such importance, logistics value and its effects are seldom measured on a multidisciplinary approach within a stakeholder and relational framework. This investigation provides empirical evidence about logistics' effects as a disaggregated element of trade facilitation and productivity in economies based on resources management insights. A partial least square (PLS) and structural equation modeling (SEM) and mediation analyses were the core empirical methodologies employed to examine the effects of the quality of transportation infrastructure, logistics, trade facilitation, and trade on the productivity of 101 countries during 2016. The empirical results evidenced the large and huge effects of transportation infrastructure on trade facilitation and logistics. Logistics revealed a medium effect on trade facilitation. While transport infrastructure and logistics did not impact trade, logistics proved its larger effect on trade facilitation towards trade while trade acknowledged a large effect on productivity. The investigation concluded logistics is a vital resource—directly and indirectly—of trade facilitation to strengthen economies' productivity. Hence, the quality of transportation infrastructure and trade facilitation implementations may not be enough to tackle trade facilitation challenges and ongoing efforts in economies, directing the government leaders to prioritize logistics in public management to reap global production networks' benefits.