Impact of Logistics Performance on Trade with Specific Reference to Garment Sector in Cambodia, Bangladesh and India

Abstract

The article focuses on the comparative analysis of impact of logistics performance on trade with respect to garment sector in Cambodia, Bangladesh and India. Although logistics performance is at the grass-roots level, it is seen that it has a significant impact on trade through various studies as well as empirical analyses. The article employs panel data analysis to assess the impact of logistics performance on trade across the three countries Cambodia, Bangladesh and India over the time period ranging from 2001 to 2016 for garment sector. The results obtained through empirical analysis indicate causes and impacts of logistics performance on trade in case of garment sector. Logistics performance has been denoted by the Logistics Performance Index (LPI) and the adoption of e-clearance mechanisms. The study suggests that government should promote private and foreign investment in infrastructure development projects. There is a need to implement Electronic Data Interchange (EDI) systems to reduce the informal payment options and to reduce transport costs. Specifically, in case of Cambodia, it can be suggested to shift to a multimodal urbanized transport system to lower transport costs and attract competition. India and Bangladesh have been major traders in the garment sector and the countries’ logistics environment has evolved due to high trade performance.