Logistics performance, transaction cost economics, trade liberalization, and agricultural food worldwide

Abstract

Abstract The purpose of this study is to examine the relationship between multi-explanatory variables and food trade in a global context to fill a research gap using System General Method of Moments (GMM) framework analysis that, to the best of our knowledge, has not been applied regarding this issue, our aim is to contribute to the existing literature. The study provides additional insight by explaining the link between transaction cost economics, logistics performance, and food trade, which remains unknown. Therefore, the paper provides further insights compared to the earlier work by shedding light on how various dimensions of logistics performance determine food export and import in light of the current situation of food shortages. The model results indicated that trade liberalization has a negative impact on food exports and imports. The adoption of chemical fertilizers has a significant and negative impact on food exports but is insignificant on food imports due to a significant shift in consumer demand from inorganic to organic foods globally. The model's findings show that logistics services, shipments, customs and clearance, and infrastructure are all significant and positive drivers of agricultural food exports and imports except for timeliness and tracking and tracing. The size of agricultural land is found to be positively and significantly related to the food trade. Therefore, countries should integrate logistics performance enhancement, transaction cost economics, and an organic production system into their policy formulation and implementation to increase food trade. A framework makes the countries with low transaction costs more likely to trade food with other low transaction cost countries and vice versa for high transaction costs.