Determinants of logistics’ performance: a new approach towards analysis of economic corridors and institutional quality impact

Abstract

Recently, the relationship between economic corridors and logistics performance has been intensively investigated. However, only few studies analyze other factors through which the economic corridors affect logistics quality. Therefore, we aim to estimate the impact of economic corridors on logistics performance, in a way to account for institutional effect, by constructing multiplicative interaction model. Our proposed model was tested using the difference-in-differences estimator and panel data of 36 European countries along The Belt and Road Economic Corridors between 2007 and 2018. Considering robustness tests and appropriate estimation techniques our analysis showed that economic corridors affect countries logistics performance via institutional quality. However, several limitations need to be acknowledged. The first one is related to the availability of the data as The Belt and Road Initiative (BRI) was introduced only recently, limiting the length of the analyzed period. Secondly, no official or generally accepted definition of the BRI exists, thus it is very difficult to identify its geographical scope. Therefore, applying the same methodology for data, several years after the announcement of BRI, future research could include more countries and additional time periods to explore the matter in more detail. Despite the fact, our approach assumes that the initiatives of economic corridors should be accompanied by stronger institutions and good governance to have higher levels of countries logistics performance. Moreover, this study confirms that economic corridors is very complex economic phenomenon and further studies should consider the role of moderators of this nexus.