The Role of The Logistic Sector on Economic Growth Modelling: An Example of European-Union Countries

Abstract

Purpose – This study aims to examine the effect of the logistics performance level of the country on economic growth within the framework of the export-led growth model. Design/methodology/approach – The study is based on balanced panel data consisting of exports, logistics performance index, investment, financial development, and economic growth for 26 European Union countries for the period of 2007-2020. Findings: The findings of the study reveal that the export-led growth model is valid in European Union countries. Besides, the level of logistics performance plays an important role in the impact of exports on economic growth; therefore, it has been found that economic growth depends on the level of logistics performance. Discussion – According to the findings of the study, since the increase in exports will increase economic growth, policymakers in European Union countries should provide a stable macroeconomic environment in order to encourage the export of goods and services. To achieve competitive advantage, governments need to evaluate the existing country-level logistics system and determine, through policies, which subsystems need to be optimised, developed or completely cancelled.