Logistics performance and export competitiveness: European experience

Logistics performance has become a decisive factor in export competitiveness. At the same time, and as a result of the continuous enlargement processes it has undergone, the European Union (EU) is a very interesting case to study how the reforms that enhance logistics performance have affected exports. Therefore, this paper aims to analyse the importance of logistics performance in regard to EU exports over the period 2005-2010 in an attempt to identify possible advances on behalf of Member States. Several gravity equations are estimated using the Logistics Performance Index (LPI) and its components as characteristic proxy variables of trade facilitation. In order to avoid the possible heterogeneity caused by sample bias, the two-stage model proposed by Heckman is used. The estimations of the gravity models using the two-stage Heckman model for all 26 EU countries have led us to conclude that logistics was more important for exporting nations than importing nations in both 2005 and 2010, reinforcing the interest in the exporter side of the paper. In reference to the components of the LPI, Competence and Tracking has acquired greater importance in recent years, in keeping with the weak domestic demand in European countries and the search for new international markets.