Logistics and trade flows in selected ECOWAS Countries: An empirical verification

This study investigates the role of logistics and its six components on trade flows in selected Economic Community of West Africa States (ECOWAS) countries. The impact of other macro-economic variables on trade flows was also investigated. Ten countries were selected in twelve years period. We decomposed trade flows into import and export trade. The World Bank Logistics performance index was used as a measure of logistics performance. The LPI has six components, and the impact of these components on trade flows were also examined. The random-effect model was used to explain the cross-country result that was obtained. The results showed that logistics has significant impact on import trade and also, it has positive but weak impact on export trade. The study revealed that competence in local logistics service industry and timeliness of shipment has positive and significant impact on import trade. It was also found that Competence of local logistics service industry, ease and affordability of handling shipment and timeliness of shipment in reaching final destination has positive and significant relation with export trade. Efficiency and effectiveness of custom has a positive and significant impact on import trade. The study recommended the introduction of the single window system and improvement in border management to reduce the cost associated with Logistics and thereby enhance trade.