A Correlative Analysis of Modern Logistics Industry to Developing Economy Using the VAR Model: A Case of Pakistan

Abstract

The modern logistics industry has opened new strategic perspectives in establishing its interrelation with economic growth. In recent years, understanding such an overlap has become a policy issue considering ever-increasing factors and their influence on this relation. Most existing studies have explored this interaction from a general perspective, or for developed countries. This paper explores time-series analysis of the dynamic variables and their inter-related influence in both the short and long run on the relationship between modern logistic industry and economic growth—a more specific perspective, particularly for developing countries. Accordingly, we exemplify our analysis by employing the vector autoregression (VAR) model to the most updated time series data of investment in the logistics industry and the economic growth of Pakistan from 1990 to 2018. The empirical findings endorse the previous studies’ outcomes and recognize the importance of sustainable economic development concerning continuously improving the logistics industry. However, a unidirectional relation is observed that economic growth leads to developing the logistics industry—economic growth exerts a significant demand-pull effect on Pakistan’s logistics. It implies that logistic industrial development is comparatively quicker in the geographical areas where economic growth is higher than those areas where economic growth is low. To conclude this study’s findings, logistics industry reforms should prioritize the selected geographical areas in improving the economy that would lead to the modern logistics industry’s development. As the model adopts Pakistan’s context, the overall statistical analysis can be generalized to other developing economies. These results would be of particular interest to strategy makers working in developing countries and help them design and develop modern transportation and logistics, coupled with interlinked technological factors, which would attract investment in the logistics industry for sustainable economic development.

Prediction of Regional Logistics Heat and Coupling Development between Regional Logistics and Economic Systems

“…(6) Growth rate of added value of logistics, LE 6 , which reflects the development speed and overall trend of regional logistics. (7) Growth rate of logistics investment, LE 7 , which reflects the ability and trend of regional logistics attracting internal/external investment. (8) Logistics development environment, LE 8 , which comprehensively reflects the development expectation of regional logistics.…”

“…Regional logistics interacts with regional economy. Economic development expands the traffic network, improves the integration between transportation methods, and thus boosts the development of logistics industry [7][8][9][10].…”

A Correlative Study of Modern Logistics Industry in Developing Economy and Carbon Emission Using ARDL: A Case of Pakistan

“…Sustainable development performance examines three areas: people (social), planet (environment), and profits (economic). In this aspect, the logistics industry has continued to evolve as a complex entity involving dynamic systems and their inter-related influence under social preferences and environment policy implications-a modern logistics industry [1]. Despite many advantages, it is also a leading source of carbon emissions that contribute around half of the world's total volume [2].…”

“…Existing studies have analyzed the complex interface of logistics industry, economic growth, and carbon emission from various perspectives, such as (1) investment in transport as a threat to the environment [6], (2) carbon emission leading to boost economic growth [7], and (3) geographical features in exploring such a relationship [7][8][9]. Only a few studies capture the comprehensive view of logistics infrastructure and its relationship with economic development and carbon emission [10,11].…”

“…First, current literature mostly emphasizes transport and logistics infrastructure. Notably, most logistics industry components-the modern logistics industry [1], reference [12]-are ignored when simultaneously estimating their short-and long-run effects besides testing the given propositions on the projected coefficients in the long-run. This interpretation and implementation of most logistics industry components need to apply in an appealing, straightforward way [13] and require a single-form equation [14], while existing studies applied procedures in a system of equations.…”