Measuring Foreign Trade-Logistics Efficiency: A DEA Approach and the Malmquist Index

With the effect of globalization, the importance of logistics activities has increased for both countries and companies. In particular, governments have aimed to improve their logistics performance in recent years. The World Bank has started to publish the Logistics Performance Index (LPI) since 2007, evaluating countries regarding their logistics activities. LPI has six sub-dimensions: “customs,” “infrastructure,” “international shipment,” “quality of logistics services,” “tracking/tracing,” and “timeliness.” This study aims to investigate the logistics performance of the member countries of the Organization for Economic Cooperation and Development (OECD) in respect to foreign trade. For this, LPI sub-dimensions, foreign direct investment, and export volumes are considered to measure the efficiencies. In this research, LPI and foreign trade values belongs to OECD member countries for 2007–2018 period are analyzed with using Data Envelopment Analysis (DEA) and Malmquist Index (MI). The main motivation of this study is to examine the changes in the foreign trade-logistics efficiencies of the OECD member countries from 2007 to 2018. This research can be regarded as being among the first studies in this context and provides a perspective for countries to improve their logistics efficiencies. Furthermore, the case of Turkey is investigated in detail to point out how developing countries can evaluate themselves compared to the developed ones. In conclusion, according to the results, some countries appear performing better in terms of logistics efficiencies related to foreign trade values. Moreover, the comparison analyses reveal that Turkey’s efficiency is at a low level, and it needs to make necessary technical and legal arrangements for all dimensions of LPIs. Required steps which can be rearranged for Turkey are also discussed at the end of the study.