The Strength of the Association Between Financial Development and Logistics Performance(Finansal Gelişmişlik ve Lojistik Performans Arasındaki Bağlantının Boyutu)

Abstract

Academic studies assume a positive association between development of finance and logistics performance, however, few empirical studies examine the relevance and strength of this relationship. To cover this gap, this paper tests the association between development of finance and logistics performance incorporating the countries’ governance quality and global competitiveness variables into the model. We use the PLS-SEM method to concurrently examine whether the countries’ good governance and financial sophistication spur superior logistics performance, which stimulates better global competitiveness for the countries. The results strongly support the conceptual assumptions. Notably, one unit increase in development of finance leads 0,517 unit increase in logistics performance. It is also shown that logistics performance has the greatest direct impact on global competitiveness compared to governance quality and financial development.

Keywords

• financial development
• financial sophistication
• logistics performance
• good governance
• competitiveness