RELATIONSHIP BETWEEN DOMESTIC LOGISTICS OPPORTUNITY EFFICIENCY AND INTERNATIONAL LOGISTICS OPPORTUNITY EFFICIENCY BASED ON MARKET POTENTIAL: EMPIRICAL RESEARCH ON DEVELOPING COUNTRIES

Abstract

Purpose- This research has two main purposes. The first purpose is to determine the domestic and international logistics opportunity efficiency levels based on the market potentials of developing countries. The second purpose is to determine whether the domestic logistics opportunity (DLO) efficiency of developing countries has a significant effect on the international logistics opportunity (ILO) efficiency. Methodology - Two basic analysis techniques have been applied in this study. In the first analysis, two output-oriented data envelopment analysis (DEA) models have been developed to determine the DLO and ILO efficiency of developing countries. The data of the input variables are taken from the Market Potential Index (MPI) 2021 report. Data for output variables are taken from the Agility Emerging Markets Logistics Index (AEMLI) 2022 report. In the second analysis, simple regression analysis has been applied to determine the relationship between DLO efficiency and ILO efficiency. The sampling consists of 45 developing countries. Findings- According to the DEA Model-1, the DLO efficiency of 26 developing countries has been determined at the full efficiency level. 19 countries are not at the full efficiency level. According to the DEA Model-2, the ILO efficiency of 31 developing countries has been determined at the full efficiency level. 14 countries are not at the full efficiency level. According to the simple regression analysis findings, DLO efficiency has a positive and significant effect on ILO efficiency. Conclusion- It has been determined which country should focus on which input variable for the developing countries that are not at the full efficiency level to reach the full efficiency level. It has been determined that the DLO and ILO efficiency of five countries are different. Empirical evidence has been obtained that the steps to be taken to increase the DLO efficiency will also increase the ILO effectiveness.

Keywords

• Domestic logistics opportunity
• international logistics opportunity
• emerging market potential
• DEA
• linear regression analysis

References

1. Brueckner, M. Carneiro, F. (2017). Terms of trade volatility, government spending cyclicality, and economic growth. Review of International Economics. 25(5), 975-989. DOI: 24513/Apalall.2017.123
2. AEMLI (2022), Agility Emerging Markets Logistics Index 2022, available from https://www.agility.com/en/emerging-markets-logistics index/#:~:text=They%20offer%20insights%20into%20strategic,business%20conditions%20and%20digital%20readiness, access date: 01.06.2022.
3. Bienstock, C. C., Mentzer, J. T., & Bird, M. M. (1997). Measuring physical distribution service quality. Journal of the Academy of marketing Science, 25(1), 31-44.
4. Bugarčić, F. Ž., Skvarciany, V., & Stanišić, N. (2020). Logistics performance index in international trade: case of Central and Eastern European and Western Balkans countries. Business: Theory and Practice, 21(2), 452-459.
5. Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of Operational Research, 2(6), 429-444.
6. Civelek, M.E., Uca, N., & Çemberci, M. (2015). The mediator effect of logistics performance index on the relation between global competitiveness index and gross domestic product. European Scientific Journal, 11(3), 368- 375.
7. Daugherty, P. J., Stank, T. P., & Ellinger, A. E. (1998). Leveraging logistics/distribution capabilities: the effect of logistics service on market share. Journal of Business Logistics, 19(2), 35.
8. Demir, O., Poyraz, S., Üre, S. & Karaköy, Ç. (2021). Gayrisafi Sabit Sermaye Oluşumlarinin Yeni Gelişen Pazarlar Lojistik Performans Endeksi Üzerindeki Etkis., ICCDSS, 22-24 Ekim 2021, 29-38.

9. Ekici, Ş. Ö., Kabak, Ö., & Ülengin, F. (2019). Improving logistics performance by reforming the pillars of Global Competitiveness Index. Transport Policy, 81, 197-207.
10. Erkan, B. (2014). The importance and determinants of logistics performance of selected countries. Journal of Emerging Issues in Economics, Finance and Banking, 3(6), 1237-1254.
11. Fikru, E. (2021). The effect of freight transport service performance on global market competitiveness. Studies in Economics and Business Relations, 2(2), 89-99.
12. Göçer, A., Özpeynirci, Ö., Semiz, M., (2021). Logistics performance index-driven policy development: An application to Turkey. Transport Policy, 124, 20-32 DOI: https://doi.org/10.1016/j.tranpol.2021.03.007
13. Hannah, L. (2008). Logistics, market size, and giant plants in the early twentieth century: a global view. The Journal of Economic History, 68(1), 46- 79.
14. Kabak, Ö., Ekici, Ş. Ö., & Ülengin, F. (2020). Analyzing two-way interaction between the competitiveness and logistics performance of countries. Transport Policy, 98, 238-246.
15. Kline, R. B., (2011). Principles and practice of structural equation modelling (3rd ed.). New York, Guilford press.
16. Korinek, J., & Sourdin, P. (2011). To What Extent Are High-Quality Logistics Services Trade Facilitating? (No. 108). OECD Publishing.
17. Liu, J., Yuan, C., Hafeez, M., & Yuan, Q. (2018). The relationship between environment and logistics performance: Evidence from Asian countries. Journal of Cleaner Production, 204, 282-291.
18. Lu, M., Xie, R., Chen, P., Zou, Y., & Tang, J. (2019). Green transportation and logistics performance: An improved composite index. Sustainability, 11(10), 2976.
19. Maiboroda, O. Y., Bezuhla, L. S., Gukaliuk, A. F., Shymanska, V. V., Momont, T. V., & Ilchenko, T. V. (2020). The global value of distribution networks and logistic opportunities. International Journal of Economics & Business Administration (IJEBA), 8(1), 227-238.
20. Martí, L., Martín, J. C., & Puertas, R. (2017). A DEA-logistics performance index. Journal of Applied Economics, 20(1), 169-192.
21. Mentzer, J. T., Myers, M. B., & Cheung, M. S. (2004). Global market segmentation for logistics services. Industrial Marketing Management, 33(1), 15-20.
22. Mentzer, J. T., & Williams, L. R. (2001). The role of logistics leverage in marketing strategy. Journal of Marketing Channels, 8(3-4), 29-47.
23. MPI (2021), Market Potential Index, https://globaledge.msu.edu/mpi, access date: 01.06.2022.
24. Newbold, P. (2000). İşletme ve iktisat için istatistik (Çev. Ü.Şenesen) (4. baskı), literatür yayıncılık.
25. Polat, M., Kara, K., & Yalcin, G. C. (2022). Clustering countries on logistics performance and carbon dioxide (CO2) emission efficiency: An Empirical Analysis. Business and Economics Research Journal, 13(2), 221-238
26. Puertas, R., Martí, L., & García, L. (2014). Logistics performance and export competitiveness: European experience. Empirica, 41(3), 467-480.
27. Sergi, B. S., D’Aleo, V., Konecka, S., Szopik-Depczyńska, K., Dembińska, I., & Ioppolo, G. (2021). Competitiveness and the logistics performance index: the ANOVA method application for Africa, Asia, and the EU regions. Sustainable Cities and Society, 69, 102845.
28. Uca, N., İnce, H., & Sümen, H. (2016). The mediator effect of logistics performance index on the relation between corruption perception index and foreign trade volume. European Scientific Journal, 12(25), 37-45.
29. Wang, M. L., & Choi, C. H. (2018). How logistics performance promotes the international trade volume? A comparative analysis of developing and developed countries. International Journal of Logistics Economics and Globalisation, 7(1), 49-70