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Global logistics indicators, supply chain metrics, and bilateral trade patterns

Author

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  • Hausman, Warren H.
  • Lee, Hau L.
  • Subramanian, Uma

Abstract

Past research into the determinants of international trade highlighted the importance of the basic spatial gravity model augmented by additional variables representing sources of friction. Studies modeled many sources of friction using various proxies, including indices based on expert judgment in some cases. This paper focuses on logistics friction and draws on a data set recently compiled by the World Bank with specific quantitative metrics of logistics performance interms of time, cost, and variability in time. It finds that the new variables that relate directly to logistics performance have a statistically significant relationship with the level of bilateral trade. It also finds that a single logistics index can capture virtually all of the explanatory power of multiple logistics indicators. The findings should spur public and private agencies that have direct or indirect power over logistics performance to focus attention on reducing sources of friction so as to improve their country's ability to compete in today's global economy. Moreover, since the logistics metrics are directly related to operational performance, countries can use these metrics to target actions to improve logistics and monitor their progress.

Suggested Citation

  • Hausman, Warren H. & Lee, Hau L. & Subramanian, Uma, 2005. "Global logistics indicators, supply chain metrics, and bilateral trade patterns," Policy Research Working Paper Series 3773, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3773
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    References listed on IDEAS

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    Cited by:

    1. Yoshino, Yutaka, 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa," Policy Research Working Paper Series 4575, The World Bank.
    2. Rauch, James E., 2010. "Development through synergistic reforms," Journal of Development Economics, Elsevier, vol. 93(2), pages 153-161, November.
    3. Liu, Lan & Yue, Chengyan, 2013. "Investigating the impacts of time delays on trade," Food Policy, Elsevier, vol. 39(C), pages 108-114.
    4. Ira Haavisto & Alain Vaillancourt, 2017. "The Effect of ICT on Supply Chains of Emerging Markets," CIRANO Working Papers 2017s-28, CIRANO.
    5. Hildegunn Kyvik Nordås, 2008. "Vertical Specialisation and its Determinants," Journal of Development Studies, Taylor & Francis Journals, vol. 44(7), pages 1037-1055.
    6. Robb, David J. & Liu, Fei & Lai, Richard & Ren, Z. Justin, 2012. "Inventory in mainland China: Historical, industry, and geographic perspectives," International Journal of Production Economics, Elsevier, vol. 135(1), pages 440-450.

    More about this item

    Keywords

    Common Carriers Industry; Transport and Trade Logistics; Economic Theory&Research; Free Trade; Trade Policy;

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