A holistic analysis of national e-commerce and logistics development

Abstract

The aim of this work is to support policymakers and civil society to better understand various international indicators related to e-commerce and logistics performance, such as the United Nations Conference on Trade and Development (UNCTAD)’s business-to-consumer index (B2C), the World Bank’s logistics performance index (LPI) and the World Bank’s trading across borders (TAB) indicators. A holistic approach is adopted herein to analyse these indicators, using a data envelopment analysis (DEA) methodology. In examining countries worldwide with a focus on the Asia-Pacific region as an example, findings from this analysis support the widely held belief that Singapore is on the frontier of e-commerce and logistics. More interestingly, the results show that some countries, such as Mongolia and Georgia, which do not rank high according to B2C, LPI or TAB, are also on the frontier. The interpretation of such results is that, given the national resources available, these countries, in theory, produce the best possible outputs (i.e. national e-commerce and logistics performance) with those resources. However, this also indicates that, given the available resources, it would be difficult for these countries to further improve the performance of logistics and e-commerce without long-term economic and social development. For those countries that score far below the frontier, this is indeed a blessing in disguise. It means these countries have the potential to further enhance their performance without the need of additional resources. This paper proposes that a holistic DEA approach should be used regularly to track how the position of the frontiers move over time and to assess the performance of countries in relation to the evolving frontiers.