A Correlative Study of Modern Logistics Industry in Developing Economy and Carbon Emission Using ARDL: A Case of Pakistan

Abstract

The modern logistics industry in relation to economic growth and carbon emission has opened new strategic perspectives. Recent research work have analyzed such complex interference from a broad perspective. However, analyzing this overlap needs comprehensive insight into the logistics industry while simultaneously estimating its short-run and long-run effects from regional aspects due to continue-evolving factors and their impact on it. This paper competently analyzes logistics industry components in connection with economic prosperity, energy consumption, trade development, and carbon emission from a more specific regional perspective of a developing country. Methodologically, an autoregressive distributive lag model (ARDL) is employed using correlative evaluation of the dynamic factors and their interactive impact in short and long run on this relation, based on time-series data of Pakistan from 1990 to 2019. The study results endorse the previous studies’ outcomes by recognizing that an increase in carbon emission depends on trade development, energy usage, economic development, and the logistics industry’s various components except for air logistics. However, study results show a unidirectional long-run causality directing from economic development, logistics industry, energy utilization, and trade development to carbon emission. Moreover, these results reveal that this emission is the leading factor to introduce stringent emission standards that further overlap with regional demographics trends, i.e., carbon emission implications. These findings imply that economic development applies a substantial demand-pull impact on national logistics, i.e., regional economic development directs to the growth of the logistics industry in the corresponding region. Consequently, high-income geographical regions have higher long-run risk concerning contemporary developmental activities of the logistics industry when adhering to carbon emission standards. Particularly, the influence of upcoming emission standards must be prioritized when planning the future returns of contemporary research and development activities of the logistics industry in a given geographic area, such as CPEC. Given Pakistan’s perspective, the proposed empirical analysis can be exampled to other developing countries. This analysis may facilitate the design and development of strategies for upcoming financial funding in the modern logistics industry to seek its sustainable development-goals in developing economies.