Abstract
Logistics has become one of the most important economic sectors. It significantly affects the transport infrastructure and many other sectors that are crucial for the country’s development. It is the factor that also influences trade efficiency. However, the question arises if logistics performance is significant for the trade of critical goods which are energy raw products. The aim of the paper is primarily to investigate the EU energy trade flows in general and to estimate the effect of logistics performance on the international trade of energy raw products. The energy raw products are grouped into solid, liquid, and gaseous products, and separate estimates are made for their export and import. The analysis also differentiates between the trade flows, that is export and import within the EU and trade flows between EU member states and third countries. The empirical model is based on the theory of gravity model extended to include the six subcomponents of the Logistics Performance Index (LPI). The results present that: (1) the standard gravity model variables, such as GDPs of reporter and partner countries and contiguity, are successful in explaining the trade flows of solid and liquid raw energy but in case of gas products, are insignificant; (2) the results indicate that all logistics’ performance subcomponents are highly significant and show positive effects on the export of liquid energy products, while for the solid and gas products, it seems to be insignificant when the energy commodities are more complex and costly to transport and store, and therefore, contiguity, i.e., when countries share a common border, positively affects energy trade; (3) the EU imports most liquid energy products, but is generally very dependent on energy imports. EU policymakers should strive to either make more use of domestic resources or switch more to renewable energy sources.
Highlights
Logistics has become one of the most important economic sectors
These results suggested that the export of energy products is less responsive to logistics performance, which significantly affects trade in consumption goods, for example
This paper aimed to investigate the impact of logistics performance on bilateral trade in energy, focusing on 28 EU Member States
Summary
Logistics has become one of the most important economic sectors. It significantly affects the transport infrastructure and many other sectors that are crucial for the countries and regions’ development. On a micro-scale, it meaningfully increases the attractiveness of corporations, while on a macro scale, it has a major contribution to the national economy, creating employment, national income, and affecting foreign investment and trade. Several scholars have used different models and methods to study the importance of logistics on economic development, the environment, and energy consumption. Their research results present that the expansion of effective logistics activities and businesses has an impact on breaking down the barriers between regions and linking raw materials and sub-products suppliers, production, and final consumers [1]. Most academics underline that logistics performance and economic growth are interconnected in a way that the development of the logistics industry constantly promotes regional development and builds economic integration [2,3,4,5,6,7]
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