An analysis of explanatory factors of logistics performance of a country

The paper uses standard econometric techniques and the Logistics Performance Index calculated by The World Bank for evaluating the impact of several key macroeconomic variables on the quality of the logistics sector from 42 countries and regions. The regression results and the graphs have revealed that there is a strong relationship between the development of the services sector and the logistics performance of a country. Services are a major source of sustainable economic development, but they are very sensitive to the quality of the infrastructure and the functioning of institutions. Another finding is that many economies where a significant part of value added is generated in industrial activities tend to have high growth rates and lower logistics performance. Many of these countries are located in Central and Eastern Europe and their economic expansion was mainly supported by foreign direct investments in industrial sites and real estate developments. Since these businesses are cyclical there is a high risk of an economic downturn. These countries, particularly Romania, should rapidly improve their trade and transport facilitation framework, i.e., logistics performance. Such measures will allow the emergence of a robust service sector able to make the economic development sustainable by cushioning the cyclical shocks from the industrial side of economy.