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The effects of Logistics Performance Index on International Trade of Korea  

Lim, Eun Jung (한국개발연구원, 경제전략연구부)
Jun, Sung Hee (순천대학교 사회과학대학 경상학부 무역학전공)
Publication Information
Journal of Korea Port Economic Association / v.35, no.1, 2019 , pp. 77-96 More about this Journal
Abstract
Logistics and transportation are increasingly playing a crucial role in international trade relations. Logistics services provide sectoral connections within the local economy. The efficient logistics services facilitate the flow of products; besides ensuring safety and speed of movement, they can reduce the cost of cross-border trade. The Logistics Performance Index (LPI) evaluates the efficiency of customs, quality of transportation service, and infrastructure for overland and maritime transport in each country it covers. The objective of this article is to analyze the impact of the various LPI indicators of Korea's trading partners. The impact of LPI on trade varies according to the income level of the trading partners. The results show that an improvement in any of the components of the LPI can lead to significant growth in a country's trade flow. Exports to Korea will increase as the LPI of the trading partner country is higher. This index has a greater impact on the exports of low-income countries.
Keywords
Logistics Performance Index; Korean Trade; Gravity model;
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