Abstract:

Developments in logistics performance lower trade costs as they enhance competition degree and economic growth. In this regard, logistics has become one of the fundamental determinants for countries’ international trade performance. In this study, the effects of developments in logistics performance on the international trade of the European Union and MENA countries were analysed using gravity model. The results of the empirical findings show that countries’ logistics performance and subcomponents that form the logistics performance such as customs, infrastructure, international shipments, logistics quality and competence, tracking-tracing and timeliness play a pivotal role in explaining the foreign trade performance amongst countries. Therefore, logistics performance could be one of the fundamental determinants for the competition amongst countries, and consequently, policymakers that desire to increase their exports and be more competitive in the international market need to take precautions as to improve logistics performance.