An Empirical Analysis on Logistics Performance and the Global Competitiveness

By Yildiz, Turkay | Business: Theory and Practice, March 2017 | Go to article overview

An Empirical Analysis on Logistics Performance and the Global Competitiveness


Yildiz, Turkay, Business: Theory and Practice


Abstract. Logistics has been identified as an area to build cost and service advantages. Therefore, companies are more focused on customer needs and trying to find ways to reduce costs, improve quality and meet the growing expectations of their clients. Indeed, the global competition has led managers to begin to address the issue of providing more efficient logistics services. In this regard, this paper presents an empirical study on logistics performance and global competitiveness. This paper also identifies the associations between logistics performances and global competitiveness. The results indicate that some variables in global competitiveness scores contribute much higher to the logistics performances than the other variables through analysis. The variables that contribute much higher than the other variables to the logistics performances are shown.

Keywords: logistics performance, transportation, supply chain, competitiveness, developing countries.

JEL Classification: L91, L98, L25.

Introduction

Supply chains cover multiple continents and include suppliers and customers. They are complex structures, involving sea, air, rail and road movements, and different types of storage needs, as well as the multitude of other related activities. With increasingly fierce competition between companies, companies have focused on providing products and services in a very efficient manner (Yi 2012). To do this, an essential way is to design and coordinate the supply and distribution networks, namely the main issue is the efficient management of the supply chain (Yi 2012). Globalization and fierce competition are among the factors that led managers begin to consider the question of providing more efficient logistics services. The complex and changing environment, the demand for diversified markets require companies to engage in this competition (Yi 2012). With the challenges of global competition, business enterprises are more focused on customer needs and finding ways to reduce costs, improving quality and meeting the growing expectations of their customers (Lai and Cheng 2009). For this purpose, many of them have found the logistics as the area for reducing the costs and improving services efficiency (Lai and Cheng 2009).

The current research was undertaken to address the issue of how logistics performances and global competitiveness relate to each other. Are there any significant relationships between logistics performance score and global competitiveness? Which pillars of global competitiveness highly correlate with the logistics performances? Based on the income levels of group of countries, are there any significant changes in the mean values of global competitiveness over the seven-year period? Which pillars of global competitiveness are showing significant differences?

The remainder of this paper is organized as follows. Section 1 reviews the literature on logistics. Section 2 introduces the data and methods used for the analyses by using various measures drawn from the World Bank (2016) and World Economic Forum (WEF)'s (2016) Global Competitiveness Index (GCI) database. It investigates the associations between logistics performance indicators and WEF's GCI scores. Section 3 presents and discusses the empirical findings. The paper is concluded in the last Section.

1. Literature review

Studies of logistics, business and transport performance in relation to the competitiveness have been made by many researchers. Current research reflects the increasing amount of international literature in this area based on different viewpoints. For example, Puertas et al. (2014) investigated the European experience of logistics performance and export competitiveness. Feng and Notteboom (2013) studied the peripheral challenge by small and medium sized ports in multi-port gateway regions in the northeast of China. Alexis et al. (2010) performed the measurement of logistics performance of the autonomous port of Cotonou in Berlin. …

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