Influence of Logistics Competitiveness and Logistics Cost on Economic Development: An FsQCA Qualitative Approach

Abstract

Logistics is an important sector that determines a country’s economic strategy while attaining higher impetus in terms of globalization and competitiveness. Infrastructure along with trade friendly government policies are the key important parameters for a competitive logistics sector. One such method to evaluate competency is the logistics performance index (LPI) by the World Bank. This index evaluates the logistics performance of the economies of the world and rank them on the basis of six parameters (customs, infrastructure, timeliness, tracking & tracing, logistics competence and international shipments). This research study illustrates the impact of logistics costs (LC) and logistics competency parameters (LPI) on the economic development. The fuzzy set qualitative comparative analysis (fsQCA) methodology is applied to identify the causal configuration relations for higher values of economic development (GDP per capita). Eight major economies across Asia (China, India, Japan, Singapore), Europe (Germany, France), the UK and the USA have been studied for the analysis. The Czech Republic and Slovenia are also included to the list of countries to have a perspective of mid-sized economies. These mid-size economies are landlocked countries (Czech Republic) and a smaller port sector (Slovenia) for logistics. The results indicate two configurations of LPI and LC that lead to higher values of GDP per capita. The major contribution to the existing literature is in identifying the influence of LPI index parameters along with LC on the economic development. The associated results illustrate that logistics competence, infrastructure and tracking & tracing of LPI index are identified as the core parameters, resulting in the higher values of GDP per capita. The results offer various insights into future area of research for evaluating new parameters such a LC to be inducted in LPI for evaluating logistics performance.