Efficiency of scale of logistics in the production of the world's countries (2007-2018)

Abstract

Logistics is an important factor in global production. However, this does not mean that we know the impact of logistics on production and its efficiency in the short and long term. The content of the paper reflects the results of research conducted on the contribution of logistics to the scale efficiency of the world's countries. This research uses a production function of the type proposed by Mankiw et al. (1992) to study the effect of logistics on scale efficiency through data envelopment analysis (DEA) for one hundred and thirty-three countries in the world during the period 2007-2018. This research establishes that logistics is an important channel for improving scale efficiency for the countries of the world in view of the estimation results. This research contributes to the literature by estimating the contribution of each of the components of the Logistics Performance Index (LPI), developed by the World Bank, to scale efficiency. The results highlight the significant impact of logistics on global efficiency. Available World Bank data show that a 1% increase in the logistics performance index increases the current global level of the efficiency scale by 0.42%.