Article

The Effect of Foreign Trade Review

1–16
Infrastructure and © 2020 Indian Institute of
Foreign Trade
Logistics Performance Reprints and permissions:
in.sagepub.com/journals-permissions-india
on Economic DOI: 10.1177/0015732520947676
journals.sagepub.com/home/ftr
Performance:The
Mediation Role of
International Trade

Alassane D.Yeo1,  Aimin Deng1 and

Todine Y. Nadiedjoa2

Abstract
This paper evaluates the effect of infrastructure and logistics performance on
economic performance. In addition, the mediating role of international trade on
the relationship between infrastructure and economic performance, and logistics
performance and economic performance, respectively. Generalized Structured
Component Analysis (GSCA) was proposed as a Component-Based Approach to
Structural Equation Modeling (SEM) to test several hypotheses regarding the inter-
action of the latent variable. Furthermore, the mediation analysis using regression
was performed. Based on data from middle income selected countries, the hypoth-
esis about the mediation role of international trade was partially supported. Our
results also suggest that infrastructure and logistics performance improvements
may enhance middle-income countries sustainable growth with increasing interna-
tional trade volume.

JEL: F43, L90, P33

1
Institute of Transportation and Logistics, School of Economics and Trade, Hunan University, Changsha,
China.
2
School of Economics and Trade, Hunan University, Changsha, China.

Corresponding author:
Alassane Dounignatieme Yeo, Institute of Transportation and Logistics, School of Economics and Trade,
Hunan University, Changsha 410082, China.
E-mail: yad.elisec@gmail.com
2 Foreign Trade Review

Keywords
Infrastructure, logistics performance, international trade, economic growth, inter-
national trade, GSCA, SEM, mediation analysis

Introduction
The assessment of the impact of infrastructure on economic growth in developing
countries has been the focus of academic discussion over many years. Accord-
ing to Srinivasu and Rao (2013) infrastructure, is essentially the foundation on
which economic growth is based. Infrastructure is the hub of the global economy
and a necessary component of all economic production. The role of infrastructure
in economic growth is critical to the prosperity of the nation and the health and
well-being of its people (Szreter, 1997). The quality of infrastructure has an im-
pact on a country’s economy, affecting business productivity, GDP, employment,
national and international trade and international competitiveness. Roads, water
systems, mass transportation, airports and utilities are all examples of infrastruc-
ture. Also, it covers those supporting services that help the growth of directly
productive activities like agriculture and industry (Sakai, 2006; Xueliang, 2008).
Recently, logistics performance and its impact on international trade and
economic performance has entered the discussion and has offered a large scope of
study in this area. According to Gani (2017), international trade is based on logi-
stics services. Good logistics reduce the cost of trade, knowing that supply chains
are as good as their weakest link. The logistics industry has begun to focus on
eliminating some of the inefficiencies associated with traditional shipping and
delivery business models. Today, all industries depend on the logistics sector, and
the logistics dimensions of transport and communication have a considerable impact
on economic growth in OECD countries (Sezer & Abasiz, 2017). Therefore, new
technologies are targeting a variety of logistics services, including automated
scheduling, consolidation of deliveries from multiple shippers, on-demand trucking
and data analysis by carriers. These new techniques have brought innovation in
trade facilitation, helping lower costs related to the movement of goods and services,
and increase the volume of trade between nations (Miroudot et al., 2009).
Most countries are implementing reforms or investing in infrastructure as well
as in the logistics sector to facilitate transport and trade and to promote modern
and efficient services. However, despite these efforts, relevant studies reveal a
large difference in the development of logistics between countries. High-income
countries have a logistics performance score that is 48 per cent higher, on average
than in low-income countries (Martí et al., 2014). For developing countries,
improving logistics depends on their infrastructure, customs procedures, level of
logistical skills and regulations. The logistics sector is constantly improving all
over the world, and the level of competition in this area is also increasing. As a
result, companies are continually developing in terms of costs, human resources,
the quality of activities and management processes, efficiency and technology
(Batarlienė et al., 2017). Recently, logistics has emerged as a dynamic sector that
is developing rapidly on a global scale and therefore has a very prominent role in
international trade and economic success.
Yeo A. et al. 3

Empirical studies on the relationship between infrastructure, international trade

and economic performance are numerous, while those linking logistics perfor-
mance to economic performance are limited. Straub (2008) analyses the linkages
between infrastructure and economic growth and the composition, sequencing
and efficiency of alternative infrastructure investments. Mohmand et al. (2017)
employed a panel of data using the unit root, cointegration and Granger Causality
(GC) model to test whether causal linkages between economic growth and trans-
portation infrastructure. These studies estimated the relationship between infra-
structure and economic growth. The direct and indirect effects of transportation
infrastructure have a positive impact on economic growth and development. Tong
et al. (2014) used multivariate time series analysis to determine the dynamic rela-
tionships between transport infrastructure, exports and economic growth. The
results suggest that the formation of highways and streets indirectly affects eco-
nomic growth by increasing the capital stock of non-transport infrastructure and
increasing private capital. On the other hand, some studies have suggested that the
growth of international trade stimulates public infrastructure development (Ismail
& Mahyideen, 2015; Kodongo & Ojah, 2016). Since trade is a driver of demand for
transport and logistics, an increase in international trade will affect the growth of
these countries. Chu (2012) employed the dynamic panel data approach and GMM
System estimates to investigate the long-term relationship between logistics invest-
ment and economic growth, using a dataset covering 30 provinces over the period
1998 to 2007 in China. The result suggests that the logistics system has been
increasingly recognised as one of the important driving forces for economic
growth. Therefore, the contributive role of logistics investment is more significant
for undeveloped interior provinces than for coastal provinces.
The value of this study lies in the model presented, which indicates the role of
both infrastructure and logistics performance in economic performance through
international trade. This study can contribute, on a practical level, to identifying
and confirming the role that trade logistics services play in the global economy.
However, it is essential to pay attention to the variables that have an impact on
economic performance and to make practical recommendations to strengthen
international trade for a stable and sustainable economy. Investing now in these
indicators will further save the economies of developing countries over the long
term while creating economic opportunities, improving quality of life, and ensur-
ing public health and safety. Therefore, the research questions to be examined in
this study are presented in the following sections. The rest of this article is struc-
tured as follows. The third section provides the methodology, and estimation
technique and data description. The following section presents and discusses the
results obtained of different tests. The final section concludes and outlines some
limitations of the study.

Research Framework and Hypothesis Development

This section synthesises the constructs into a broad conceptual framework and
develops hypotheses that will be tested later in the data analysis. Each hypothesis
4 Foreign Trade Review

Figure 1.  Conceptual Research Model

Source: Authors.

is clearly illustrated and explained to identify the potential relationships. We con-

ceptually develop a theoretical model (Figure 1) and proposed eight hypotheses.

Infrastructure, International Trade and Economic Performance

Empirical research showed that infrastructure development improves the export
performance of developing countries. The impact of trade facilitation factors on
exports of a selection of African countries has been studied by Jordaan (2014). A
country’s trade is dependent not only on its trade facilitation reforms but also on
those of the trading partners. The result shows that an improvement in the customs
environment within the importing country provides the largest gain in terms of
increasing trade flows, followed by the regulatory environment and domestic
infrastructure. Iwanow and Kirkpatrick (2009) estimate a standard gravity model
augmented with trade facilitation, regulatory quality and infrastructure indicators.
Their results show that trade facilitation reforms could contribute to improving
export performance in Africa. However, other reforms including the quality of the
regulatory environment and the quality of the basic transport and communications
infrastructure, are also needed.
Shepherd and Wilson (2008) analyse infrastructure in ASEAN member
countries. Their findings show that import and export costs vary considerably in
the member countries, from very low to moderately high levels. Using a standard
gravity model, the authors find that trade flows in Southeast Asia are particularly
sensitive to transport infrastructure and information and communications techno-
logy and point out the vital role that transport infrastructure can play in enhancing
intra-regional trade. Felipe and Kumar (2012) shows that there have been signifi-
cant gains in trade due of improving infrastructure in Central Asian countries.
These gains in trade vary from 28 per cent in the case of Azerbaijan to 63 per cent
in Tajikistan. Clark et al. (2004) points out that a reduction in inefficiencies in
transport costs can result in an increase in bilateral trades of countries to the US.
Yeo A. et al. 5

Dennis and Shepherd (2011) concludes that infrastructure development promote

export diversification in developing countries. Therefore, we propose the follow-
ing hypotheses:

H1:  Infrastructure has a positive effect on international trade.

H2:  Infrastructure has a positive effect on economic performance.

Kuştepeli et al. (2012) investigates the effect of investment on highway infra-

structure on international trade and economic growth in Turkey for the period of
1970 to 2005. The empirical results from causality and cointegration analysis sug-
gest only a very weak short-run effect of the share of exports in Gross National
Product (GNP) on highway transportation expenditures. However, no long-run
relationships between highway infrastructure expenditures, economic growth and
international trade in Turkey. Sahoo and Dash (2012) also found that the relation-
ship between infrastructure development and international trade contributes sig-
nificantly to output growth in South Asia. Therefore, investment in transport
infrastructure facilitates the movement of goods, resulting in a higher standard of
living for people and stimulating economic growth.
Calderón (2009) provides a comprehensive assessment of the impact of infra-
structure development on growth in African countries. Based on econometric esti-
mates for a sample of 136 countries from 1960–2005, the authors evaluate the
impact on per capita growth of faster accumulation of infrastructure stocks and
the enhancement in the quality of infrastructure services for 39 African countries
in three key infrastructure sectors: telecommunications, electricity and roads. The
findings show that growth is positively affected by the volume of infrastructure
stocks and the quality of infrastructure services. Indeed, African countries, as well
as less developed countries, are more likely to benefit from larger infrastructure
stocks than from improvements in the quality of existing infrastructure. Therefore,
we propose the following hypotheses:

H3: Infrastructure has a positive effect on economic performance through

international trade.
H4: International trade has a positive effect on economic performance.

Logistics Performance, International Trade and Economic Performance

Previous research has established the relationship between international trade and
economic performance (Boldrin & Scheinkman, 1988; Wong & Yip, 1999).
However, logistics performance has become a decisive factor in export competi-
tiveness (Green et al., 2015). Lean et al. (2014) states that the development of the
logistics sector is expected to have a positive impact on increasing production,
consumption and trade, thus stimulating economic growth. The quality and effi-
ciency of logistics services can matter for international trade as a weak logistics
infrastructure, and operational processes can be a major obstacle to global trade
integration (Devlin & Yee, 2005). Otherwise, an improved trade-related logistics,
6 Foreign Trade Review

combined with a liberalised economic environment, can increase trade volume

and economies of scale and scope in distribution and production activities
(Lakshman et al. 2001).
In the present context, the review explores whether there is a systemic relation-
ship between logistics performance measures and export orientation of economies
across time periods. Tang and Abosedra (2019) examines the hypothesis that
export-led growth (ELG) depends on logistics performance in Asia. The study is
based on balanced panel data from 23 Asian countries over the period 2010–2016.
The results show that the ELG hypothesis is valid in all countries examined. In
addition, and more significantly, the performance of the logistics sector proves to
be an important facilitator of trade. Therefore, economic growth in Asia is condi-
tioned by the level of logistics performance in the countries examined. Puertas
et al., (2014) analyses the importance of logistics performance for EU exports
over the period 2005–2010 to identify possible advances for member countries.
Several gravity equations are estimated using the Logistics Performance Index
(LPI) and its components as proxy variables characteristic of trade facilitation.
The results concluded that logistics was more important for exporting nations
than for importing nations in 2005 and 2010. The components of the LPI have
become more important in recent years due to weak domestic demand in devel-
oped countries and the search for new international markets. Therefore, we pro-
pose the following hypotheses:

H5:  Logistics performance has a positive effect on international trade.

H6:  Logistics performance has a positive effect on economic performance.
H7: Logistics performance has a positive effect on economic performance
through international trade.

Infrastructure and Logistics Performance

In general, a quality infrastructure would enable the logistics industry to plan,
control the flow and storage of goods, services and related information from the
point of origin to the point of consumption to meet customer requirements.
Therefore, logistics services play a crucial role, and the challenges of providing
effective logistics support are increasing as countries move into more complex
and higher value-added manufacturing and production processes become increas-
ingly fragmented (Mangan & Lalwani, 2016). For developing countries, improv-
ing logistics depends on their infrastructure, customs procedures, level of logistical
skills and regulations.
Munim and Schramm (2018) used a structural equation model (SEM) to
provide empirical evidence of significant economic impacts of port infrastruc-
ture quality and logistics performance. They assumed that better quality of port
infrastructure (such as modern technologies and equipment) would help improve
the logistics performance (LP) of a country (that is, greater reliability, less damage,
ability to track and trace shipments, timeliness of delivery, etc.). Efficient
infrastructure services lower transaction costs, raise value-added and increase
potential profitability while also increasing and expanding linkages to global
Yeo A. et al. 7

supply chains and distribution networks for producers (Hassanain & Loov, 2003;
Limao & Venables, 2001).

H8:  Infrastructure is positively correlated with logistics performance.

Method

Sample
This study considered data from 62 selected lower-middle and upper-middle-
income countries every two years, considering the availability of data. The data
cover the period of 2010 to 2018 and are obtained from the following sources:
World Development Indicator, World Bank Logistics Performance Index, WEF’s
Global Competitiveness Report and the Doing Business report. The data for GDP
are taken per capita in US dollars. Thus, all the indicators are rescaled on a range of
0 (lowest performer) to 1 (top performer) using the min-max normalisation method.

Data Analysis Procedure

Component-based SEM known as GSCA and mediation analysis using regression
has been used in this study. The SEM method is able to analyse data comprehen-
sively both the relationship between latent variables and the relationship between
manifest variables in each latent variable. Latent variables are unobserved variables
that are difficult to quantify or measure directly. Therefore these variables need
indicators or manifest variables. For this reason, the manifest variables well known
as observed or measured variables, act as indicators in the SEM model.
In this study, there are four latent variables named infrastructure (IN), logistics
performance (LP), international trade (IT) and economic performance (EP) repre-
sented by (PGDP), and 13 manifest variables are used. GSCA was proposed
an alternative method to partial least squares for component path analysis as a
component-based approach to SEM, in which latent variables are defined as com-
ponents or weighted composites of observed variables (Hwang et al., 2010). The
method also replaces factors with exact linear combinations of observed variables
(Hwang & Takane, 2004). IBM SPSS AMOS software version 22 was used to
conduct data analysis. All those processes are necessary to get usable data for
further analysis.

Results

Measurement Model
The measurement model specifies the rules of correspondence between measu-
red and latent variables. The constructs were tested validity and reliability. The
8 Foreign Trade Review

measurement model was assessed by examining the construct reliability, con-

vergent validity and discriminant validity (Hair et al., 2016).
Item reliability indicates whether the items are reliable enough to form the
construct. Items are reliable for a construct if the outer loading value is 0.70 or
higher (Wong, 2016). There are two common measures of construct’s reliability:
Cronbach alpha (CA) and composite reliability (CR). Coefficient alpha is used as
a more conservative measure of items and it estimates the multiple item scale’s
reliability. The internal reliability of a construct is seen to be achieved when the
CA value is 0.7 or higher (Hair et al., 2014).
To measure the reliability of the construction, the CR and CA were evaluated.
From the measurement in this study, the value of first-order CR is between 0.799
and 0.937 and the range of CA values is between 0.921 and 0.998 (see Table 1),
which is above the threshold value of 0.7, meaning that the constructed measure-
ment model is reliable and fit to the model (Hair et al., 2014). The average variance
extracted (AVE) were used to assess convergent validity. All the construct AVE
values were found within the range of 0.502–0.773, which is above the threshold
values of 0.50 and which indicate the convergent validity of this model is well
accepted (Hair et al., 2019). Correlations between the constructs were calculated by
means of Pearson’s product moment correlations. A (Pearson) correlation is a num-
ber between –1 and +1 that indicates to what extent two metric variables are linearly
related. A correlation is statistically significant if its “Sig. (2-tailed)” < 0.05. The
results show that the strongest correlation is between export and import: r = 0.996,
export and PGDP: r = 0.977 and import and PGDP: r = 0 .978 (see Table 2).

Table 1.  Assessment Results of Measurement Model

Constructs/Items Items Loading AVE A CR

Logistics Performance
Customs 0.772 0.715 0.933 0.937
Infrastructure 0.866
Ease of shipment 0.935
Logistics services 0.797
Ease of tracking 0.894
Timeliness 0.797
Infrastructure
Transport infrastructure 0.809 0.502 0.921 0.799
ICT 0.872
Trading across borders 0.757
institution 0.844
International Trade
Export 0.772 0.773 0.998 0.870
Import 0.975
Economic Performance
PGDP 1
Source:
Notes: CR—composite reliability,AVE—average variance extracted, a—Cronbach’s alpha, confidence
level used—0.950.
Table 2.  Correlation

INF ICT BTE INS CUS QTI EOS LSE EOT TIM EXP IMP PGDP
INF 1
ICT .476** 1
BTE .350** .314** 1
INS .647** .424** .283** 1
CUS .465** .413** .326** .420** 1
QTI .505** .465** .304** .387** .823** 1
EOS .407** .405** .319** .267** .664** .709** 1
LSE .459** .403** .388** .307** .735** .825** .731** 1
EOT .381** .362** .343** .229** .612** .733** .690** .834** 1
TIM .292** .301** .336** .259** .508** .631** .651** .734** .787** 1
EXP .274** .115* .034 .177** .345** .488** .378** .448** .405** .340** 1
IMP .283** .112* .053 .183** .359** .503** .394** .469** .425** .355** .996** 1
PGDP .222** .090 .009 .137* .298** .449** .333** .413** .372** .306** .977** .978** 1
Source:
Note: *Correlation is significant at the 0.05 level (2-tailed). **Correlation is significant at the 0.01 level (2-tailed).
10 Foreign Trade Review

Structural Model
With appropriate reliability, convergent and discriminant validity, researchers can
proceed to verify the accuracy and prove the hypotheses of the structural model
(Hulland, 1999). The structural model and its latent variables represent the theo-
retical and conceptual link between the observed input and output data. Based on
the structural model, the goal of the analysis is to predict the output layer data by
means of the input layer data. In other words, the structural model is used to illus-
trate one or more dependence relationships according to the construction of the
hypothesized model.
The structural model was developed to analyse the path relationships of differ-
ent constructs in the hypothetical model. The hypotheses are tested in two steps.
First, we tested the significance of direct path analysis of the variables; in which
we analysed the significance of the path coefficient through bootstrapping of
5,000 subsamples. Bootstrapping is a non-parametric re-sampling procedure that
involves repeated random sampling with replacement from the original sample
(Hair et al., 2006). Second, we analysed the mediation effect of international trade
between infrastructure and economic performance, and logistics performance and
economic performance, respectively. We used the R-squared (R2) value in the

Figure 2.  Structural Equation Modelling

Source:
Yeo A. et al. 11

Table 3.  Results of Structural Equation Modelling

Hypothesis St. Estimate S.E. C.R. p Significant

INàIT H1 .021 .003 7.883 *** Yes
INàEP H2 .131 .094 1.396 .163 No
INàITàEP H3 –.043 .049 –.874 .382 No
ITàEP H4 –.110 .081 –1.357 .175 No
LPàIT H5 .016 .002 8.353 *** Yes
LPàEP H6 .427 .108 3.937 *** Yes
LPàITàEP H7 .444 .062 7.209 *** Yes
LPßàIN H8 0.011 .001 7.583 *** Yes
Source:
Note: St.—estimates standardized estimates, S.E.—standard error, C.R.—critical ratio.
*** p < .001.

dependent variable to measure the explanatory power of the structural model. The
study tests the association between the independent and dependent variables by
path coefficient (β) and t-statistics. According to Table 3 and Figure 2, there is
direct and positive significant relationship of LP on IT (β = 0.016, p < .001) and
EP (β = 0.427, p < .001), and IN on IT (β = 0.021, p < .001). Therefore, H1, H5
and H6 are supported. Similarly, LP has positive and indirect relationship on EP
through IT (β = 0.444, p < .001). Thus, hypothesis H7 is accepted. There is a posi-
tive and significant correlation between LP and IN. Thus, hypothesis H8 is
accepted. EP have not significant relationship on IN (β = 0.131, p = .163), and IT
(β = –0.110, p = .175). Thus, hypothesis H2 and H4 are not supported. Further, IN
has found no relationship with EP through IT (β = –0.043, p = .383). Therefore,
H3 is not supported.

Test for Mediation Effect

Following the guideline of Coutts et al. (2019), mediating effect of international
trade on the association between infrastructure and economic performance, and

Table 4.  Summary of Mediation Analysis Dependent Variable (outcome):

Economic Performance

Independent Variable (predictor) Infrastructure Logistics Performance

Path a 0.0506 *
0.0966**
Path b 0.7672*** 0.7142***
Mediated effect of international trade: 0.0388** 0.0688***
Product of a and b
Path c (total effect) 0.1322** 0.2371***
Path c’ (direct effect of X on Y) 0.0933** 0.1684***
Boot LLCI (indirect effect) –0.079 –0.017
Boot ULCI (indirect effect) 0.1277 0.1826
Source:
Note: Bootstrapping (n = 5000). ***p ≤ .001, **p ≤ .01, *p ≤ .05.
12 Foreign Trade Review

logistics performance and economic performance, respectively. The path coeffi-

cient is a determinant of mediating effect analysis which is measured by the direct
path of the independent and mediating variable and mediating and dependent
variable. From the path coefficients of the bootstrapping the results found the
significance of the mediating effect which has been calculated following the sug-
gestions of Hair et al. (2014). The results of the mediating effect are shown in
Table 4. The results indicate that there is a significant indirect effect of infrastruc-
ture on economic performance through the mediation of international trade (β =
0.0388, p < .01) and logistics performance on economic performance through the
mediation of international trade (β = 0.0688, p < .001). This finding supports the
hypothesis H3 and H7. This result demonstrates that international trade partially
mediates the relationship between infrastructure and economic performance, and
logistics performance and economic performance.

Discussion
This paper has developed a conceptual framework for assessing the effects of infra-
structure and logistics performance on the economic performance of middle-income
countries through international trade. Economic growth is the most powerful instru-
ment for reducing poverty and improving the quality of life in developing countries.
The recent development of logistics has certainly facilitated international trade to
such an extent that logistics has become increasingly important. This study develops
a hypothetical model to assess the relationships between each latent variable. Finally,
this study evaluated the mediating effect of international trade in the relationship
between infrastructure and economic performance, and logistics performance and
economic performance, respectively.
The findings of this research indicate that international trade can mediate the
relationship between infrastructure and economic performance, and logistics per-
formance and economic performance in the middle-income countries. This implies
that lower-middle-income countries need to improve their infrastructure and
logistics performance in order to improve economic performance. The empirical
evidence shows the higher correlation between infrastructure and logistics perfor-
mance. It means that the development of infrastructure as well as logistic perfor-
mance is essential for the growth of a country and especially for less developed
countries.
This study contributes theoretically to the literature on logistics performance,
infrastructure and growth in several ways. The mediating effect of international
trade completes the link between infrastructure, logistics and economic perfor-
mance. Countries can achieve superior performance by promoting trade through
the creation of adequate roads and other infrastructure to facilitate trade (Abe &
Wilson, 2009; Bougheas et al., 1999). Trade facilitation needs to consider the
whole range of hard and soft infrastructure, including better logistics services.
Inter-organisational integration of supply, operations and logistics activities and
their concern for the welfare of the people can be considered as effective tools for
improving sustainable economic performance (Liu et al., 2012; Sarkis et al., 2010).
Yeo A. et al. 13

Infrastructure is the main driver of progress in the best-performing countries,

followed by improvements in logistics services and customs and border manage-
ment (Arvis et al., 2018; Portugal-Perez & Wilson, 2012). In countries with better
economic performance, there is close cooperation in all aspects of the develop-
ment of services, infrastructure and efficient logistics. Unfortunately, the logistics
gap between rich and poor countries persists, the global recession, and the debt
crisis in Europe and many other countries has diverted attention from logistics
reform. At a time when food prices are reaching unprecedented levels, studies
have also shown that logistics are essential for food security. Transport and logis-
tics have a direct effect on the price and availability of food in local markets
because they determine the performance and resilience of food chains (Doernberg
et al., 2016), particularly in African and Middle Eastern countries that are heavily
dependent on food imports (Takele & Buvik, 2019).

Conclusion and Limitation

Conclusion
The research attempted to find the relationship between infrastructure and logistics
performance and how they could improve economic performance through inter-
national trade. This study adopts Generalized Structured Component Analysis
(GSCA) to examine the performance outcomes of infrastructure, logistics per-
formance, international trade and economic performance. Mediation analysis using
regression provides empirical evidence of the mediating effect of international trade
between infrastructure and economic performance, and logistics performance and
economic performance. Improving infrastructure and logistics performance are the
best way for the les pays à revenu intermédiaire pour renforcer le commerce
international, thus enhance economic performance. The study result found a positive
correlation of independent variables. International trade has also been found to act
as a mediator between infrastructure and economic performance, and between
logistics performance and economic performance. Furthermore, this analysis
provides insights through multilaterally agreed measures to strengthen the provision
of logistics services and the efficiency of international supply chains. It also
encourages organizations to increase funding towards trade facilitation, to help
middle-income countries enhance international trade. We provide insight into the
need for lower-middle and upper-middle-income countries to increase investment in
logistics services and infrastructure to achieve sustainable competitive advantages.

Limitation
Despite the theoretical and practical contributions mentioned above, it is
essential to recognize the limitations of our study that may provide opportunities for
future research. First, data were collected only from lower middle-income-and
14 Foreign Trade Review

upper-middle-income countries. Future studies may include low income and high-
income countries. Secondly, the data has been collected on different websites. The
future target studies should include the opinions of managers from companies in a
variety of fields, such as industry, commerce, transport, health. Thirdly, this study
examines the mediation effect. Future research may include moderator in strategic
and use other technics to examine the relationship between infrastructure, logistics
performance, international trade and economic performance.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research,
authorship and/or publication of this article.

Funding
The authors received no financial support for the research, authorship and/or publication
of this article.

References
Abe, K., & Wilson, J. S. (2009). Weathering the storm: Investing in port infrastructure to
lower trade costs in East Asia. The World Bank.
Arvis, J. F., Ojala, L., Wiederer, C., Shepherd, B., Raj, A., Dairabayeva, K., & Kiiski, T.
(2018). Connecting to compete 2018: Trade logistics in the global economy. World
Bank.
Batarlienė, N., Čižiūnienė, K., Vaičiūtė, K., Šapalaitė, I., & Jarašūnienė, A. (2017). The
impact of human resource management on the competitiveness of transport companies.
Procedia Engineering, 187, 110–116.
Boldrin, M., & Scheinkman, J. A. (1988). Learning-by-doing, international trade and
growth: A note. The Economy as an evolving complex system, 285–300.
Bougheas, S., Demetriades, P. O., & Morgenroth, E. L. (1999). Infrastructure, transport
costs and trade. Journal of international Economics, 47(1), 169–189.
Calderón, C. (2009). Infrastructure and growth in Africa. The World Bank.
Chu, Z. (2012). Logistics and economic growth: A panel data approach. The Annals of
regional science, 49(1), 87–102.
Clark, X., Dollar, D., & Micco, A. (2004). Port efficiency, maritime transport costs, and
bilateral trade. Journal of Development Economics, 75(2), 417–450.
Coutts, J. J., Hayes, A. F., & Jiang, T. (2019). Easy statistical mediation analysis with
distinguishable dyadic data. Journal of Communication, 69(6), 612–649.
Dennis, A., & Shepherd, B. (2011). Trade facilitation and export diversification. The World
Economy, 34(1), 101–122.
Devlin, J., & Yee, P. (2005). Trade logistics in developing countries: The case of the Middle
East and North Africa. World Economy, 28(3), 435–456.
Doernberg, A., Zasada, I., Bruszewska, K., Skoczowski, B., & Piorr, A. (2016). Potentials
and limitations of regional organic food supply: A qualitative analysis of two food
chain types in the Berlin Metropolitan Region. Sustainability, 8(11), 1125.
Felipe, J., & Kumar, U. (2012). The role of trade facilitation in central Asia: A gravity
model. Eastern European Economics, 50(4), 5–20.
Gani, A. (2017). The logistics performance effect in international trade. The Asian Journal
of Shipping and Logistics, 33(4), 279–288.
Yeo A. et al. 15

Green, K. W., Toms, L. C., & Clark, J. (2015). Impact of market orientation on environmental
sustainability strategy. Management Research Review, 38(2), 217–238.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Atham, R. L. (2006). Multivariate
data analysis (6th ed.). Pearson Prentice Hall.
Hair, J. F., Sarstedt, M., Hopkins, L. G., & Kuppelwieser, V. (2014). Partial least squares
structural equation modeling (PLS-SEM) an emerging tool in business research.
European Business Review , 26 (2), 106–112.
Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2016). A primer on partial least
squares structural equation modeling (Pls-Sem). SAGE Publications.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to
report the results of PLS-SEM. European Business Review, 31(1), 2–24.
Hassanain, M. A., & Loov, R. E. (2003). Cost optimization of concrete bridge infrastructure.
Canadian Journal of Civil Engineering, 30(5), 841–849.
Hulland, J. (1999). Use of Partial Least Squares (PLS) in strategic management research: A
review of four recent studies. Strategic Management Journal, 20(2), 195–204.
Hwang, H., & Takane, Y. (2004). Generalized structured component analysis.
Psychometrika, 69(1), 81–99.
Hwang, H., Ho, M. H. R., & Lee, J. (2010). Generalized structured component analysis
with latent interactions. Psychometrika, 75(2), 228–242.
Ismail, N. W., & Mahyideen, J. M. (2015). The Impact of infrastructure on trade and
economic growth in selected economies in Asia (ADBI Working Paper 553). SSRN
Electronic Journal.
Iwanow, T., & Kirkpatrick, C. (2009). Trade facilitation and manufactured exports: Is
Africa different? World Development, 37(6), 1039-1050.
Jordaan, A. C. (2014). Regional integration in Africa versus higher levels of intra-Africa
trade. Development Southern Africa, 31(3), 515–534.
Kodongo, O., & Ojah, K. (2016). Does infrastructure really explain economic growth in
Sub-Saharan Africa?. Review of Development Finance, 6(2), 105–125.
Kuştepeli, Y., Gülcan, Y., & Akgüngör, S. (2012). Transportation infrastructure investment,
growth and international trade in Turkey. Applied Economics, 44(20), 2619–2629.
Lakshmanan, T. R, Subramanian, U., Anderson, W. and Leautier, F. (2001). Integration of
transport and trade facilitation. Directions in Development. World Bank Publications.
Lean, H. H., Huang, W., & Hong, J. (2014). Logistics and economic development:
Experience from China. Transport Policy, 32, 96–104.
Limao, N., & Venables, A. J. (2001). Infrastructure, geographical disadvantage, transport
costs, and trade. The world bank economic review, 15(3), 451–479.
Liu, S., Kasturiratne, D., & Moizer, J. (2012). A hub-and-spoke model for multi-dimensional
integration of green marketing and sustainable supply chain management. Industrial
Marketing Management, 41(4), 581–588.
Mangan, J., & Lalwani, C. C. (2016). Global logistics and supply chain management. John
Wiley & Sons.
Miroudot, S., Lanz, R., & Ragoussis, A. (2009). Trade in intermediate goods and services
(OECD Trade Policy Papers 93). OECD Publishing.
Mohmand, Y. T., Wang, A., & Saeed, A. (2017). The impact of transportation infrastructure
on economic growth: Empirical evidence from Pakistan. Transportation Letters, 9(2),
63–69.
Munim, Z. H., & Schramm, H. J. (2018). The impacts of port infrastructure and logistics
performance on economic growth: The mediating role of seaborne trade. Journal of
Shipping and Trade, 3(1), 1.
16 Foreign Trade Review

Portugal-Perez, A., & Wilson, J. S. (2012). Export performance and trade facilitation
reform: Hard and soft infrastructure. World development, 40(7), 1295–1307.
Puertas, R., Martí, L., & García, L. (2014). Logistics performance and export com-
petitiveness: European experience. Empirica, 41(3), 467–480.
Sahoo, P., & Dash, R. K. (2012). Economic growth in South Asia: Role of infrastructure.
The Journal of International Trade & Economic Development, 21(2), 217–252.
Sakai, M. (2006). Public sector investment in tourism infrastructure. In Larry Dwyer &
Peter Forsyth (Eds.), International handbook on the economics of tourism (pp. 266–
279). Edward Elgar Publishing.
Sarkis, J., Helms, M. M., & Hervani, A. A. (2010). Reverse logistics and social sustainability.
Corporate Social Responsibility and Environmental Management, 17(6), 337–354.
Sezer, S., & Abasiz, T. (2017). The impact of logistics industry on economic growth: An
application in OECD countries. Eurasian Journal of Social Sciences, 5(1), 11–23.
Shepherd, B., & Wilson, J. S. (2008). Trade facilitation in ASEAN member countries:
Measuring progress and assessing priorities. The World Bank.
Srinivasu, B., & Rao, P. S. (2013). Infrastructure development and economic growth:
Prospects and perspective. Journal of business management and Social sciences
research, 2(1), 81–91.
Straub, S. (2008). Infrastructure and growth in developing countries: Recent advances and
research challenges. The World Bank.
Szreter, S. (1997). Economic growth, disruption, deprivation, disease, and death: On
the importance of the politics of public health for development. Population and
development review, 23(4), 693–728.
Takele, T. B., & Buvik, A. S. (2019). The role of national trade logistics in the export
trade of African countries. Journal of Transport and Supply Chain Management, 13(1),
1–11.
Tang, C. F., & Abosedra, S. (2019). Logistics performance, exports, and growth: Evidence
from Asian economies. Research in Transportation Economics, 78, 100743.
Tong, T., Yu, E., & Roberts, R. K. (2014). Dynamics of transport infrastructure, exports and
economic growth in the United States. Journal of the Transportation Research Forum,
53(1), 65–81.
Wong, K. K.-K. (2016). Mediation analysis, categorical moderation analysis, and higher-
order constructs modeling in Partial Least Squares Structural Equation Modeling
(PLS-SEM): A B2B Example using SmartPLS. Marketing Bulletin, 26.
Wong, K. Y., & Yip, C. K. (1999). Industrialization, economic growth, and international
trade. Review of International Economics, 7(3), 522–540.
Xueliang, Z. H. A. N. G. (2008). Transport infrastructure, spatial spillover and economic
growth: Evidence from China. Frontiers of Economics in China, 3(4), 585–597.