Economic Development and Logistics Performance. A Probabilistic Approach

There is not a consensus about a complete set of explanatory variables that could
ultimately explain the linkages behind achieving economic development. In spite of
this, determinants of economic development and especially the linkages between
economic development and logistics performance are topics of growing interest within
the recent literature, both in economic growth theory and maritime studies.
In this paper our attention is focused on the importance of logistics performance
as one of the explanatory variables for economic development. To this end, we have
estimated different econometric models in an attempt to explain the probability of a
country being economically developed, based on a number of traditional explanatory
variables (including natural endowments, economic openness, and institutional
framework, among others) along with logistics performance as the major theoretical
innovation. The applied methodology follows the binary choice framework described
in probit models.
In the next step the research is concentrated on the determination of possible
endogenous causalities of the economic development. In the last section we estimate
the logistics gap, measured as a probability of reaching economic development that
varies due to differences in the levels of logistics performance.
Our main finding shows that logistics performance is closely related to the probability
of a country being developed. Specifically, the probability of being a developed
country increases when logistics performance is improved.

Ricardo J. Sánchez
Georgina Cipoletta Tomassian
Daniel E. Perrotti
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