Paper 3 - Linkages Between...

Transportation Research Part A 141 (2020) 277–293
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Transportation Research Part A

journal homepage: www.elsevier.com/locate/tra
Dynamic linkages between transport, logistics, foreign direct

Investment, and economic growth: Empirical evidence from
developing countries
Samir Saidi a, b, *, Venkatesh Mani c, Haifa Mefteh a, Muhammad Shahbaz d, e,
Pervaiz Akhtar f, g
a
Faculty of Economics and Management, University of Sfax, Tunisia
b
Faculty of Law, Economics and Management of Jendouba, University of Jendouba, Tunisia
c
Montpellier Business School, Montpellier, France
d
Department of International Trade and Finance, School of Management and Economics, Beijing Institute of Technology, Beijing, China
e
COMSATS University of Islamabad, Lahore Campus, Pakistan
f
Management Systems, Logistics Institute, Faculty of Business, Law and Politics, University of Hull, UK
g
IESEG School of Management, France
A R T I C L E I N F O A B S T R A C T
Keywords: This study examines the relationship between transport, logistics, foreign direct investment (FDI),
Transport and economic growth in developing countries over the period 2000–2016. A global panel data
Logistics infrastructures comprising of 46 developing countries were collected and divided into three sub-panels: Euro
ICT
pean and Central Asian countries (ECA), Middle East, North African and Sub-Saharan countries
Foreign direct investment
Economic growth
(MENA-SSA), and East Asian, Pacific, and South Asian countries (EAPSA). Using GMM estimators,
Developing countries we found that all underlying variables influence each other in the long-run. The direction of
causal relationship between the variables tended to vary across panels with different levels of
significance. The results arising out of empirical analysis imply that transport and logistics
infrastructure do contribute to FDI ‘attractiveness’ and sustainable economic growth. These re
sults would be of particular interest to policymakers, working in developing countries, and help
them design and develop modern transportation and logistics, coupled with interlinked techno
logical factors, which could possibly be used for sustainable economic development, and which in
turn would attract FDI.
1. Introduction
Sustainable economic growth has been gaining momentum in both academia and the world at large, mainly due to its growing
relevance and relative practical implications. Scholars for instance, have shown keen interest in scrutinizing the relationship between
infrastructure and economic growth. Aschauer (1989) was possibly among the first, who through his seminal work, introduced the
concept of ‘infrastructure investment’ as a new explanatory factor of neo-classical production function (e.g. Evans and Karras, 1993;
* Corresponding author at: Faculty of Economics and Management of Sfax, University of Sfax, Tunisia. Faculty of Law, Economics and man
agement of Jendouba, University of Jendouba, Tunisia.
E-mail addresses: samirsaidi05@yahoo.com, samir.saidi@fsegs.rnu.tn (S. Saidi), manivenkat75@gmail.com (V. Mani), Haifa.mefteh@yahoo.fr
(H. Mefteh), muhdshahbaz77@gmail.com (M. Shahbaz), Pervaiz.Akhtar@hull.ac.uk (P. Akhtar).
https://doi.org/10.1016/j.tra.2020.09.020
Received 27 May 2018; Received in revised form 18 September 2020; Accepted 21 September 2020
Available online 7 October 2020
0965-8564/© 2020 Elsevier Ltd. All rights reserved.
S. Saidi et al. Transportation Research Part A 141 (2020) 277–293
Gillen, 1996; Otto and Voss, 1996; Lall, 2007; Berechman et al., 2006). In fact, most of these studies seem to have found a positive and
bi-directional relationship between infrastructure investment and economic growth. Consider Alleman et al. (1994) for South-Africa,
Fernald (1999) for United States, Groote et al. (1999) for the Netherlands, Roller and Waverman (2001) for 21 of the Organization for
Economic Co-operation and Development (OECD) countries. More recently, globalization and structural changes have greatly
accelerated economic integration, which in turn have contributed significantly in opening up of newer markets. In order to carry
forward this momentum, developing countries have been engaged in a fierce competition, attempting to woo foreign direct in
vestments (FDI), which would offer considerable funding capital to generate positive externalities. For instance, one of the most
palpable effects of FDI inflow may be seen through higher employability rates with higher salaries. Lee (2013) argued that FDI
positively affects domestic economic activities through various factors, including technology transfer, ripple effects, productivity
gains, introduction of new processes, and managerial skills.
Developing countries in the race for securing high FDI inflows, have tried to improve the investment climate ‘at home’ by intro
ducing new policies and measures. Companies, within these countries have looked to bolster their production systems, which in turn
would pave the way for developing sophisticated transport systems, enabling them to be more competitive. Interestingly, several
authors have explored the economic role of transport as a key factor of a larger economic growth (e.g. Beyzatlar et al., 2014). In fact,
these authors, among others, argued for coupling/decoupling effects between transport and economic growth. Other studies also agree
that transport systems are in fact a major determinant of the modern society, and are vital to economic growth and systems. Trans
portation supports trade, while linking both resources and markets into an integrated economy (Ramanathan, 2001; Banister and
Berechman, 2000). Nevertheless, the positive impact of transport on economic growth and FDI attractiveness depends greatly on
numerous factors such as energy consumption, environmental degradation, logistics infrastructure, and information communication
technologies (ICT).
Previously, logistical issues were of prime focus when it came to transportation and warehousing. However, today, due to increased
competition, coupled with heightened digital connectivity through inundated data, the need for logistics solutions that integrate
warehouse management, material handling and packaging, transportation, and supply chain management have increased. Here, one
may note that the logistics industry (along with transport) does contribute heavily to economic growth, as it provides support for goods
and services through complex global supply chain networks. Additionally, with the advent of ICT tools, companies today adopt new
smart production systems much faster to remain in the race. Shirley and Winston (2004) argued that investments in logistics infra
structure generate benefits by lowering inventories of firms. Hong (2007) said that logistics positively affect FDI attractiveness by
improving traffic volumes, reducing travel time and cost. Zhu et al. (2008) concur with these observations, adding that the relationship
is not mutually exclusive but interactive.
Especially for developing countries, transport systems are indeed among the main determinants of their growing economy. In fact,
the fluidity of transport flows and profitability are closely interlinked. This fluidity depends greatly on numerous factors such as
loading efficiency, unloading and transshipments executed in multimodal terminals, and reliability of vehicles. Recently, in order to
enhance their territorial attractiveness, a few developing countries have implemented ‘intelligent transport systems’ (ITS), considered
as one of the major determinants of FDI. Moreover, contemporary logistics infrastructure also facilitates spatial redistribution of
economic activities, and also provides large data sets to improve logistics operations in real-time (e.g. the use of sensor technology at
traffic lights). Extant literature has examined the relationship between economic growth and FDI (Omri and Kahouli, 2013 ; Solarin
and Shahbaz, 2015), transport infrastructure and economic growth (Groote et al., 1999; Yamaguchi, 2007; Lee and Yoo, 2016; Pradhan
et al., 2016), along with logistics and economic growth (Chu, 2012; Lean et al., 2014). However, their empirical results have been
inconclusive, which strongly motivates researchers to conduct more in-depth investigations surrounding this phenomenon.
Based on our discussion so far, this study aims to address some important research questions: (1) Are host countries able to increase
their FDI stocks by improving the quality of their public infrastructures, essentially those of transport and logistics? (2) Can FDI in
flows, transport infrastructure and logistics function in amalgamation, and contribute to economic growth of developing countries? (3)
Can positive bi-directional causality between FDI stocks, transport infrastructure and logistics functions sustain economic growth in
recipient countries? Further, this study contributes to existing literature and theories (the resources-based view and dynamic capa
bilities) in two ways. First, it looks to estimate the four-way linkages between economic growth, FDI, transport, and logistics by
employing data from 46 developing countries, divided into three sub-groups: (1) European and Central Asian countries (ECA), (2)
Middle Eastern, North African and Sub-Saharan countries (MENA-SSA), and (3) East Asian, Pacific, and South Asian countries
(EAPSA). Secondly, this study applies the Generalized Method of Moments approach for the dynamic panel data model. Importantly,
the findings describe the implications it has for policymakers in developing countries, along with those who work to improve their own
logistics and transportation systems. Moreover, the findings affirm that logistics and transportation infrastructure do conjointly attract
FDI, which in turn boosts economic growth.
2. Literature review
Research studies have always focused and examined the role of various drivers of economic growth by employing various
econometric methods. These include government consumption, population growth, energy consumption, environmental quality, fixed
investment, public infrastructure, investment in transport and telecommunications, FDI, human capital, trade, and R&D (e.g. Madden
and Savage, 2000; Demurger, 2001; Datta and Agarwal, 2004; Ding et al., 2008; Nasreen and Anwar, 2014; Shahbaz et al., 2017; Tiba
and Omri, 2017; Magazzino, 2017; Saidi and Hammami, 2017, Samir and Mefteh, 2020). For instance, based on the seminal work of
Aschauer (1989), economists have discussed investments in infrastructure as being a key variable for estimating a neo-classical
production function (Evans and Karras, 1993; Seitz, 1994; Otto and Voss, 1996; Gillen, 1996; Berechman et al., 2006; Lall, 2007).
The research investigates the relationship between transportation, logistics, foreign direct investment (FDI), and economic growth in developing countries. The study uses empirical
evidence to show these connections. The findings suggest that improvements in transport 278and logistics infrastructure have a positive effect on economic growth, and this effect is
amplified by FDI. The research highlights the importance of developing a strong infrastructure foundation to attract FDI and promote economic growth in developing countries.
Overall, the paper emphasizes the dynamic and interconnected nature of these factors in fostering economic development in developing nations.
A few other studies have attempted to investigate the impact of logistics and transport infrastructure on economic growth by their
contribution to attract FDI. Theoretically, transport infrastructure acts as a key pre-condition to FDI and economic growth (Ma and Li,
2001; Zhang and Zhang, 2001; Liu and Zhao, 2005; Zhang and Cheng, 2009; Saidi and Hammami, 2011; Yu et al., 2012; Talley and Ng,
2016). Transport infrastructure consists of various components such as roads, runways, ports, airports, railways, among others.
Infrastructure development enables multinational companies to minimize the cost of doing business, thereby improving FDI attrac
tiveness from multiple sectors. In fact, several studies have confirmed that countries with good infrastructure are indeed more
attractive in terms of FDI inflow (Erenberg, 1993; Wei, 2000; Saidi, 2016).
2.1. Transport infrastructure, logistics and economic growth
Khadaroo and Seetanah (2008) examined the relationship between transport infrastructure and economic growth for Mauritius
from 1950 to 2000. By using the dynamic time series in a vector error correction model, they found that infrastructure development
actually increases accessibility and reduces costs. Additionally, they stated that the importance of transport infrastructure develop
ment adds to the effective functioning of both domestic and foreign companies. Moreover, the non-excludable and non-congestible
qualities of transport infrastructure do decrease the cost of doing business, while significantly enhancing FDI attractiveness. Shan
et al. (2014) investigated the economic impact of seaports on host city’s economic development in China from 2003 to 2010. Based on
data from 41 major port cities, they found that port cargo throughput considerably contributed to the economic growth of the Chinese
host city. Similarly, Park and Seo (2016) studied the positive impact of port infrastructure on Korean economic growth from 2000 to
2013. They argued that in effect cargo ports largely contribute to regional economic growth when they have enough throughputs. For
multinational companies, transport infrastructure has been seen to be a consequential intermediate input in private production
process, which could directly affect their competitiveness.
For multinational companies, an intelligent transport system is crucial to develop their logistics functions, and facilitate in
vestments abroad. Several studies today, have confirmed the great economic value of logistics. They argue that logistics itself is
becoming a new industry that participates greatly in economic development of nations. By using dynamic structural models, Lean et al.
(2014) examined the relationship between logistics and economy in China from 1980 to 2009 and confirmed that the relationship
between logistics infrastructure and economic growth is positive and bi-directional in the long run. Similarly, Evangelista and Sweeney
(2009) and Chu (2012) indicated the importance of logistics that exceeds the limits of private firms, and becomes a major engine of
economic growth in both developed and developing countries. Thus, both transportation and logistics are considered as essential
elements to improve territorial attractiveness. In fact, logistics and transportation closely interact with each other. Logistics infra
structure mainly relates to the grouping of a large number of warehouses in one area. It should be accessible and connected to roads,
highway networks, and railways. In addition, a developed information system (IS) is crucial for an efficient production process for
various actors in the field of logistics. These infrastructures are crucial to construct an efficient intermodal transport system; thereby
allowing foreign companies to reduce storage costs deliver orders faster, and in a more reliable manner.
In the context of globalization and increased competition between countries, imports and exports without a solid logistical
infrastructure have posed a new economic challenge. Moreover, for countries with geographical advantage, logistics is an important
element of their competitiveness. Commercial deals with other countries are increasingly dependent on logistical efficiency and
infrastructure. Indeed, the policy of import and export promotions is incapable to offer the expected results if the logistics costs in itself
remain high. They significantly affect the overall competitiveness, especially of local importers and exporters, along with multina
tional companies and offshore projects. Therefore, logistics is certainly an important determinant of FDI.
In order to enhance their core competencies, companies increasingly outsource their production activities to professionals, who can
provide effective services at lower costs. Several research studies have investigated the economic role of logistics, and have examined
its relevance vis-a-vis the production process at large. For instance, Gunasekera et al. (2008) showed how private companies reduce
travel time and costs if they have an efficient logistics function. Similar studies by Roller and Waverman (2001) argued that in
vestments in logistics infrastructure positively affect a nation’s economic growth. They asserted the importance of better logistics
systems to attract FDI in host countries (Lu and Yang, 2006; Hong, 2007; Talley et al., 2014). By using panel data framework, they
demonstrated the impact of logistics and transport on FDI attractiveness in a sample of eight developing countries from 2000 to 2009.
2.2. Logistics and ICT relationship
To enhance the quality of logistics systems, investments in information and communication technology (ICT) is also crucial. Grace
et al. (2003) defined ICT as tools, used to facilitate production, transmission, and information processing. ICT may be divided into two
groups, i.e. traditional technologies and modern technologies. The former encompasses the radio, television, and phone, while the
latter deals with computers and the internet. Numerous studies in the recent times have concluded that advanced technologies like
radio frequency identification (RFID), bar codes, smartphones etc. have actually formed a new industry in itself, comprising of high
aptitude, high technologies and high information (Lean et al., 2014). Van Hoek et al. (2001), Simchi-Levi et al. (2003), Gunasekaran
et al. (2017) for instance have argued that ICT and infrastructure development affect the logistics systems positively. Additionally, Chu
(2012) using a dataset covering 30 Chinese provinces, looked to investigate the long-term relationship between logistics investments
and economic growth from 1998 − 2007. He employed the conditional convergence model with the dynamic panel data approach. The
empirical findings revealed that investment in logistics does positively affect regional economic growth in China. Moreover, well-
organized logistics functions must be ably supported by latest ICT tools (e.g. IoT, AI, etc.) to facilitate effective communication
flows and data management. This helps companies reduce cost, increase productivity, and avail information and analytics at the right
279
time. Interestingly, Sauvage (2003)’s work also concurs with this insight, adding that it effectively enhances cooperation between
suppliers and customers.
Several other studies have also attempted to examine the causal linkage between ICT and logistics functions. For instance, Crowley
(1998) and Van Hoek (2002) confirmed the positive relationship between ICT with transport and logistics services in an international
supply chain. Crowley (1998) added that third-party logistics (3PLs) could in fact employ ICT to transform a supply chain configu
ration. Further, ICT ensures globalization of supply chains and increased outsourcing functions; specifically, applicable in its relation
to transportation and logistics activities (McKinnon, 1999). Allab et al., 2000 stated that ICTs are considered as the first support of
logistics functioning. They provide innovative solutions for better supply chain management, and usher in several advantages in terms
of safety, service quality and control, which in turn facilitate the exchange of information and data between different actors, while
accelerating the fruition of operational tasks. ICT develops the joint work of various logistics troupes. Certainly, the new brand of ICTs
does facilitate partnerships through better coordination between actors, forging thereby a stronger bond between different parties in
the relationship Allab et al. (2000).
In conclusion, many studies have examined the economic role of transport infrastructure, and highlighted their positive contri
bution to economic growth, both in developed and developing countries (i.e. Khadaroo and Seetanah (2008) for Mauritius; Shan et al.
(2014) for China; Park and Seo (2016) for Korea). Transportation does affect the efficiency of private enterprises, and significantly
determines their competitiveness. It also affects FDI attractiveness, thereby stimulating fiscal growth of host countries (i.e. Babatunde
(2011) for Sub-Saharan African countries; Pantelidis and Nikolopoulos, (2008) for Greece; Barzelaghi et al. (2012) for Iran; Pradhan
et al. (2013) for India). In addition, efficient logistics functions allow companies to reduce both travel and costs. However, while
transportation and logistics as ‘individual entities’ have been pretty thoroughly studied, the role of transport and logistics in
frastructures in attracting private investments is something that needs more attention. In limited literature that is available in this
regard, Erenberg (1993)’s salient work argued that if the governments do not provide the right types of infrastructure, both the do
mestic private sector along with multinational companies would be challenged in their operations.
Moreover, the intelligent transport system is a new economic factor that requires in-depth theoretical and empirical studies. Some
authors have briefly discussed the growing role of advanced ICT tools in improving the productivity of transportation systems and
logistics functions. However, to our limited knowledge, no studies in the past have looked to examine a four-way relationship among
transport, logistics, FDI and economic growth. Our main contribution to the existing literature would be by examining the different
linkages between the three variables with respect to their impacts on economic growth in developing countries.
3. Research design
3.1. Sample and sample characteristics
We identified and selected data from 46 developing countries, based on the availability of data. The countries include (i) the
European and Central Asian countries (consisting of 15 countries, namely; Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Croatia,
Georgia, Macedonia, Moldova, Montenegro, Romania, Serbia, Kazakhstan, Ukraine, and Turkey) (ii), Middle Eastern, North African,
and Sub-Saharan countries: consisting of 17 countries, namely: Algeria, Angola, Botswana, Cameroon, RD Congo, Cote D’Ivoire,
Gabon, Ghana, Egypt, Iran, Jordan, Kenya, Lebanon, Morocco, Sudan, Tunisia, and Zambia; (iii), East Asian, Pacific, and South Asian:
consisting of 14 countries, namely: Bhutan, Cambodia, Fiji, Indonesia, Malaysia, Mongolia, Pakistan, Philippines, Samoa, Sri Lanka,
Thailand, Tonga, Vanuatu, and Vietnam. With data from 46 countries, we divided the global panel into three sub-panels to demon
strate specific characteristics of each group, while making the panel data analysis more homogeneous. Importantly, we did consider
Asian and African countries in the empirical investigation, since their part in terms of the international FDI volume increased
considerably in the last few decades.
According to World Investment Report (WIR, 2016)1, Asian countries seemed to attract more than 30.2% of international FDI
inflows; 431 billion dollars in 2013 to 541 billion dollars in 2015. Both China and India have attracted most of these investments i.e.
136 and 44 billion dollars respectively. The African continent on the other hand, drew in only about 4.6% of international FDI inflows.
WIR (2016) suggested that African countries received only 52 billion dollars in 2013 and 54 billion in 2015. Therefore, we chose to
examine the impact of FDI on economic growth in host countries. Additionally, based on the literature review, we noted that both
transport and logistics are key determinants of national economic development, significantly affecting the attractiveness of FDI,
especially in developing countries. As these infrastructure parameters impact economic activities, and are considered to be major
contributors to economic growth, we attempt to explore their relationship with FDI and economic growth in different regions.
Throughout the empirical investigation, we used various economic variables that are provided in Table 1. All the data, collected for the
period 2000–2016, have been sourced from the World Bank’s World Development Indicators (WDI, 2017)2. Total population has been
used to transform data into per capita units except the consumer price index.
3.2. Variable identification
To represent logistics infrastructures in empirical studies, several authors have used different proxies. For instance, Clark et al.
1
http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf
2
https://data.worldbank.org/indicator
280
Table 1
Description and measurement of variables.
Variable Description Measurement
Y Real gross domestic product Constant 2010 US$

F Foreign direct investment net inflows Constant 2010 US$
TR Transport infrastructure Kilometers of roads
G Logistics infrastructure Number of individuals using internet (% of population)
O Real trade openness Imports and exports, constant 2010 US$
E Energy consumption kg of oil equivalent
U Urbanization % of urban population of total population
FD Financial development; domestic credit to private sector Constant 2010 US$
K Capital stock Constant 2010 US$
I Inflation Consumer price index
(2004), Micco and Serebrisky (2006) considered the quality of port and airport infrastructures. They argued that the quality of in
frastructures reveal the quality of logistics function. In the same vein, it may be noted that the World Bank publishes a Logistics
Performance Index (LPI) every two years, which essentially reflects the quality of logistics in each country. This assessment is primarily
based on the quality of commercial infrastructure and associated transportation infrastructure, ease of organizing shipments at
competitive prices, effective traceability of shipments and frequency of shipments arrive at their destination on time. The index ranges
from 1 to 5, with the highest score representing the ‘best performance’.
Lean et al. (2014) among others have used per capita length of railways, freight turnover volume, real output of transportation,
warehousing and communications industry as proxies of logistics function. Chu (2012), Blyde and Molina (2015) have used ICT in
frastructures to represent logistics infrastructures. At our end, we have used proxies suggested by Chu (2012) and Blyde and Molina
(2015), due to the fact that the selected countries do not provide detailed data on port and airport efficiency. Moreover, World Bank
recently added Logistic Performance Index (LPI) with only 5 observations. For these reasons, we use ICT infrastructures measured by
number of individuals using internet (% of population) as proxy of logistics infrastructure.
3.3. Modeling and estimation technique
3.3.1. Model specification

Numerous studies have examined the main factors of economic growth both in the short-term and in the long-run by employing
various econometric approaches (Shahbaz et al., 2015a; Magazzino, 2016; Sharma, 2010; Guillaumont et al., 2017; Chen, 2017;
Harvey et al., 2017). We apply the transformed Cobb-Douglas production function, which reveals that domestic production depends on
capital and labor force, that we follow the approach of Shahbaz et al. (2015b), Magazzino (2016), and Harvey et al. (2017). We
enhance the scope of production function by incorporating FDI, energy consumption, and trade openness along with urbanization, as
additional factors affecting economic growth.
Campos and Kinoshita (2002) in their study argued that foreign investment may boost economic activity and development via
technology transfer in host countries. Furthermore, FDI has been known to stimulate employment opportunities, while promoting
exports of the host economies. Shahbaz et al. (2018) indicated that energy consumption is an important factor of domestic production
that drives economic growth. Most research studies have directly explored the nexus between economic growth and exports, known
commonly as ‘trade openness’. In this regard, Tiba and Frikha (2018) argued that exports development offers foreign exchange and
directly contributes to domestic-capital formation. Moreover, trade openness facilitates access to foreign knowledge and foreign R&D,
which in turn stimulates productivity and economic growth. Reardon (2016), Bakirtas and Akpolat (2018) along with Wang et al.
(2018), argued that apart from ‘trade openness’ ‘urbanization’, contributes equally to the economic activity by accelerating indus
trialization. In fact, urbanization enables deeper transformation of the production structure so that the tertiary sector is oriented
towards technology.
As regards the impact of infrastructures on economic growth, Fernald (1999), Yeaple and Golub (2007), Palei (2015), Zhang and Ji
(2017), along with Sun and Cui (2018) argued that public infrastructures do have great potential to boost economic growth. They
added that these infrastructures positively affect economic growth by stimulating private investments, reducing production costs,
reducing poverty, while increasing schooling rate. Roller and Waverman (2001) along with Evangelista and Sweeney (2009) have
examined the impact of ICT on economic activity. They found that using advanced ICT tools increases productivity and efficiency of
private firms. More specifically, Escribano and Guasch (2005) in their study on Guatemala, Honduras, and Nicaragua, indicated that
access to the internet does increase workers’ productivity from 11% to 15%. Based on the theoretical justifications mentioned, the
general production function is modeled as follows:
Yt = f (Ft , TRt , Gt , Et , Ot , Ut , Kt , Lt ) (1)
where, economic growth (Yt ) is a function of FDI (Ft ), transport infrastructure (TRt ), logistics function (Gt ), energy consumption (Et ),
trade openness (Ot ), urbanization (Ut ), capital stock (Kt ), and labor force (Lt ). We use the log-transformation of variables, and write Eq.
(1) with a time series specification, as follows:
The rationale for the paper "Dynamic Linkages Between Transport, Logistics, Foreign Direct Investment, and Economic Growth: Empirical Evidence from Developing Countries"
lies in the critical importance of understanding the interconnectedness of transport, logistics, foreign direct investment (FDI), and economic growth, particularly in the context of
developing countries.
Firstly, transportation and logistics infrastructure play a fundamental role in facilitating trade, commerce, and economic activities within and across borders. Efficient transport
281
networks and logistics systems are essential for reducing transaction costs, improving market access, and enhancing competitiveness. Therefore, analyzing the dynamic
linkages between transport, logistics, and economic growth provides valuable insights into how investments in infrastructure and logistics capabilities can stimulate economic
development.
lnYt = α0 + α1 lnFt + α2 lnTRt + α3 lnGt + α4 lnEt + α5 ln Ot + α6 ln Ut + α7 ln Kt

(2)
+α8 lnLt + μi, t
where, lnYt represents natural-log of per capita GDP,lnFt is natural-log of FDI inflows. lnTRt shows natural-log of transport infra
structure, while lnGt represents natural-log of logistics function. lnEt indicates natural-log of energy consumption, while lnOt repre
sents natural-log of trade openness. lnUt represents natural-log of urbanization, while ln Lt represents the natural-log of labor force, and
lnKt represents natural-log of capital stock. In Eq. (2), we also have αik representing the estimated coefficients of all independent
variables where k = 1, … , 7. The subscript i = 1, … ,46 denotes the country. The subscript t = 1, … , 17 denotes the time period.
Finally, Eq. (2) contains α0 and µit indicating constant and classical error term respectively.
There is a panel study, which allows us to write Eq. (2) in panel data form as follows:
lnYt,i = α0 + α1,i lnFt + α2,i lnTRt + α3,i lnGt + α4,i lnEt + α5,i ln Ot + α6,i ln Ut + α7,i ln Kt
(3)
+α8,i lnLt + μi, t
Keeping the effect of labor force in production function in mind, and dividing Eq. (3) by total population, we convert all the
variables into per capita units. Eq. (3) can thus be rewritten as:
lnYt,i = α0 + α1,i lnFt + α2,i lnTRt + α3,i lnGt + α4,i lnEt + α5,i ln Ot + α6,i ln Ut
(4)
+α7,i ln Kt + μi, t
Based on prior studies (Shahbaz et al., 2015a; Omri et al., 2015; Omri and Kahouli, 2014; Sy et al., 2016) we use Eq. (4) to derive the
empirical models to simultaneously treat inter-relationship between economic growth, FDI, transport, and logistics infrastructure. In
these models, we introduce energy consumption (Et ), trade openness (Ot ), urbanization (Ut ), and capital stock (Kt ) as instrumental
variables. The four-way links among growth-FDI-transport-logistics are examined by making use of the following four equations:
lnYt,i = α0 + α1,i lnFt + α2,i lnTRt + α3,i lnGt + α4,i lnEt + α5,i ln Ot + α6,i ln Ut
(5)
+α7,i ln Kt + μi, t
lnFt,i = φ0 + φ1,i lnYt + φ2,i lnTRt + φ3,i lnGt + φ4,i lnOt + φ5,i ln It + φ6,i ln Ut
(6)
+φ7,i ln Kt + μi, t
lnTRt,i = δ0 + δ1,i lnYt + δ2,i lnFt + δ3,i lnGt + δ4,i lnEt + δ5,i ln Ut + δ6,i ln FDt
(7)
+δ7,i ln Kt + μi, t
lnGt,i = ℓ0 + ℓ1,i lnYt + ℓ2,i lnFt + ℓ3,i lnTRt + ℓ4,i lnKt + ℓ5,i ln Ot + ℓ6,i ln Ut + μi, t (8)
Eq. (5) notes that economic growth may potentially be affected by FDI inflows (Ft ), transport infrastructure (TRt ), logistics function
(Gt ), energy consumption (Et ), trade openness (Ot ), urbanization (Ut ), and capital stock (Kt ). Most research studies in the past have
confirmed the positive impact of these variables on economic growth (Anwar and Sun, 2011; Achour and Belloumi, 2016; Charfeddine
and Ben Khediri, 2016; Magazzino, 2017; Saidi et al., 2018).
Eq. (6) states that FDI inflows in recipient countries may be determined by economic growth (Yt ), transport infrastructure (TRt ),
logistics function (Gt ), trade openness (Ot ), inflation (It ), and capital stock (Kt ) (Pao and Tsai, 2010; Anwar and Sun, 2011; Olumuyiwa,
2012; Lee, 2013; Omri and Sassi-Tmar, 2015; Kahouli and Omri, 2017).
Eq. (7) postulates that road transport network in a country significantly depends on economic growth (Yt ), FDI inflows (Ft ), logistics
function (Gt ), energy consumption (Et ), urbanization (Ut ), financial development (FDt ), capital stock (Kt ) (Marazzo et al., 2010; Chi
and Baek, 2013; Chi, 2016; Saidi and Hammami, 2017; Maparu and Mazumder, 2017).
Eq. (8) assumes that economic growth (Yt ), FDI (Ft ), transport (TRt ), trade openness (Ot ), urbanization (Ut ), and capital (Kt )
significantly affect the logistic function in developing countries (Evangelista and Sweeney, 2009; Perego et al., 2011; Blyde and
Molina, 2015; Guo et al., 2016; Gong et al., 2018; Zhu et al., 2017; Xie et al., 2018).
3.3.2. Estimation technique

For econometric investigation, we use dynamic panel data models in simultaneous-equations, where lagged levels of economic
growth, FDI, transport and logistics are taken into account by using the Arellano and Bond (1991) GMM estimator. The empirical
models to estimate can be rewritten as follows:
∑
4
lnYi,t = α0 lnYi,t− 1 + β1 lnFDIi,t + β2 lnTRi,t + β3 lnLGi,t + δj Xi,t + μi,t + εi,t (9)
j=1
∑
3
lnFDIi,t = θ0 lnFDIi,t− 1 + ∂1 lnYi,t− 1 + ∂2 lnTRi,t + ∂3 lnLGi,t + δj Xi,t + μi,t + εi,t (10)
j=1
∑
4
lnTRi,t = η0 lnTRi,t− 1 + λ1 lnYi,t + λ2 lnFDIi,t + λ3 lnLGi,t + δj Xi,t + μi,t + εi,t (11)
j=1
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∑
3
lnLGi,t = ℓ0 lnLGi,t− 1 + γ1 lnYi,t + γ2 lnFDIi,t + γ3 lnTRi,t + δj Xi,t + μi,t + εi,t (12)
j=1
where, lnYi,t , lnFDIi,t , lnTRi,t , lnGi,t represent gross domestic product per capita, FDI inflows, transport infrastructure and logistics
function of the country i at time t. α0 captures the parameter to estimate. μ notes the country-specific effect, whereby ε is the error term.
X exposes the vector of explanatory variables used to model economic growth (energy consumption, trade openness, urbanization, and
capital), to model FDI (trade openness, inflation, and capital), to model transport (energy consumption, urbanization, financial
development, and capital), and to model logistics (trade openness, capital stock, and urbanization). Finally, in Eq. (9), we capture the
effect of FDI, transport and logistics on economic growth by β. In Eq. (10), ∂ assumes the effect of growth, transport and logistics on FDI
inflows in country i at time t. Moreover, the effects of economic growth, FDI and logistics on transport infrastructure are measured by λ
in Eq. (11). Finally, γ in Eq. (12) postulates the effect of lnYi,t ,lnFDIi,t , and lnTRi,t on logistics function.
In this empirical investigation, we use the Generalized Method of Moments (GMM) to estimate the four Eqs. (9)–(12) simulta
neously. This method is effective even in the presence of arbitrary heteroskedasticity. It can provide consistent and effective estimates,
which show the different relationships between different variables in our models. Nevertheless, we first need to confirm the validity of
the instruments using the Hansen test to check the over-identifying restrictions by checking the validity of the instruments, while
keeping the null hypothesis of overidentifying restrictions. In other words, null hypothesis of the instruments that are appropriate
cannot be rejected. Additionally, we need a Durbin-Wu-Hausman test to analyze endogeneity. The test result rejects the null hy
pothesis, suggesting that OLS estimates may be biased and inappropriate. For these different reasons, it is assumed that the ordinary
least squares estimates were not appropriate estimation technique, and that the GMM allows us to obtain a more efficient econometric
estimation.
Further, among the major problems that prevent the use of ordinary least squares (OLS) estimators, whether with fixed or random
effects, is the correlation between lagged endogenous variables (lnYi,t− 1 , lnFDIi,t− 1 , lnTRi,t− 1 and lnGi,t− 1 ) and the error term. Several
scholars have used the Arellano and Bond (1991) approach to solve the problem by first differentiation which enhances considerably
the quality of their findings. Moreover, the GMM estimation with panel data has its own advantages as compared to the OLS approach.
First, the pooled cross-sectional and time-series data enable us to estimate the relationship over a longer period of time for several
countries. Herein, it may be noted that GMM is a simple estimator when compared to the maximum likelihood estimator. Second, any
country-specific effect can be controlled using an appropriate GMM procedure. The GMM estimator does provide robust empirical
results even without having information for accurate distribution of error term. Third, to ensure the quality of estimation, we must use
the approach introduced by Arellano and Bond (1991) that can solve the problem by first differentiation. Additionally, GMM provides
unbiased and reliable estimator without the use of matrix weights.
4. Data analysis
Table 2 shows the descriptive statistics for all variables used for empirical investigation. These statistics indicate that all variables
have nearly normal distribution, since the values of mean and median are close. Moreover, the values of Jarque-Bera statistics confirm
that the variables are almost normally distributed. The skewness negative coefficients indicate that the distribution is weakly skewed
to the left, with more observations to the right, apart from the coefficient of inflation rate, which is weakly skewed to right. Following
these statistics, we confirm the same results of Magazzino (2016) for the six Gulf Cooperation Council (GCC) countries, Saidi and
Hammami (2017) for 75 countries, and Jamel and Derbali (2016) for eight Asian economies. The correlation matrix (Table 3) confirms
the existence of positive relationship between variables. Economic growth, FDI, transport infrastructure, and logistics are correlated
both positively and significantly. Furthermore, they all have positive linkages with other exogenous variables (i.e. trade openness,
financial development, urbanization, energy use, and capital stock). However, we do find that inflation is negatively correlated with all
other variables.
The econometrical investigation primarily starts with the verification of the stationarity properties of the variables. In doing so, we
Table 2
Descriptive statistics.
Mean Median Maximum Minimum SD Skewness Jarque-Bera
lnYt 3963.0311 4031.6402 86256.8807 56.6852 3297.1947 − 0.1821 4.7868

lnFt 398.0000 344.0000 430.5689 − 55.8452 430.0000 − 0.4475 4.8145
lnTRt 51.2965 49.8193 462.8453 9.8136 3.1256 − 0.9653 6.8904
lnGt 45.6521 39.8462 87.0022 10.6275 6.0378 − 0.8112 5.4166
lnOt 132.2510 126.2545 377.5169 26.2658 10.0309 − 0.9405 3.7884
lnEt 250.2522 245.0374 18415.6954 38.4526 25.2004 − 0.5513 2.6397
lnUt 123.0384 118.3120 56254.8561 − 6.5489 7.8174 − 0.6798 3.6184
lnFDt 136.3183 140.2976 311.0635 1.8595 9.1748 − 0.9783 3.7834
lnKt 230.0000 214.0000 371.8690 0.0000 220.0000 − 0.3145 3.4764
lnIt 4.9138 6.0025 10.6248 2.1596 5.6692 1.0426 3.7895
Note: SD and CV indicate standard deviation and coefficients of variation (standard deviation-to-mean ratio), respectively.
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Table 3
Correlation matrix.
Variables lnYt lnFt lnTRt lnGt lnOt lnEt lnUt lnFDt lnKt lnIt
lnYt 1.000
lnFt 0.5251 1.000
(0.0000)
lnTRt 0.5183 0.6324 1.000
(0.0000) (0.0000)
lnGt 0.4267 0.6152 0.7484 1.000
(0.0109) (0.0000) (0.0000)
lnOt 0.4155 0.7157 0.2361 0.4291 1.000
(0.0122) (0.0000) (0.0551) (0.1012)
lnEt 0.7102 0.4682 0.8122 0.2061 0.3622 1.000
(0.0000) (0.0080) (0.0000) (0.2104) (0.2210)
lnUt 0.6700 0.3157 0.7457 0.6840 0.1483 0.7182 1.000
(0.0000) (0.0313) (0.0000) (0.0000) (0.3216) (0.0000)
lnFDt 0.5223 0.4126 0.4152 0.4050 0.2100 0.4353 0.4867 1.000
(0.0000) (0.0221) (0.0222) (0.0240) (0.2102) (0.0100) (0.0102)
lnKt 0.7261 0.3121 0.6710 0.6590 0.5843 0.2634 0.4223 0.4852 1.000
(0.0000) (0.0267) (0.0000) (0.0000) (0.0000) (0.0514) (0.0152) (0.0110)
lnIt − 0.6350 − 0.5202 − 0.1504 − 0.0514 − 0.5674 − 0.4630 − 0.2020 − 0.4432 − 0.3901 1.000
(0.0000) (0.0000) (0.3216) (0.3810) (0.0000) (0.0120) (0.2114) (0.0142) (0.0254)
Note: () shows probability values.
have applied LLC and IPS; the results of LLC and IPS unit root tests are reported in Table 4. Following the empirical results, we find that
they may reject the null hypothesis of non-stationarity at level with intercept and trend. On the contrary, LLC and IPS unit root tests
accept the alternative hypothesis at first difference, and confirm stationarity of variables. This implies that variables are integrated at I
(1).
The LLC and IPS unit root tests may provide ambiguous empirical results, as both tests ignore the cross-sectional dependence in the
series. To overcome this inadequacy, we employed the Pesaran (2004) test for computing the CD statistic to verify the presence of
cross-section dependence in data (Table 4). The null hypothesis asymptotically follows a standard normal distribution, and supposes a
cross-sectional independence. Table 5 presents the results of semi-parametric Friedman test and parametric testing procedure of
Pesaran (2004) test. These tests account hypothesis cross-sectional independence in panel-data models with small T and large N.
Importantly, these statistics indicate that the null hypothesis of cross-sectional independence should be rejected at 5% level of sig
nificance. To eliminate the dependence, the standard DF (or ADF) regressions are augmented with cross-section averages of lagged
levels and first-differences of the individual series (CADF statistics); the results are reported in Table 6. We find that all the variables are
non-stationary at level in the presence of cross-sectional dependence. At first difference, variables seem to be stationary, which
correspond to results found by earlier studies. This shows the robustness of unit root analysis, and the hypothesis that all variables are
stationary at first difference i.e. I (1).
In an additional step, we apply the panel cointegration tests for examining the presence of long-run relationship between variables,
after confirming the integrating order of the variables. In doing so, we employ the co-integration test of Pedroni (2004) formed by
seven co-integration tests on data from both homogeneous and heterogeneous panels. These tests are further divided into two groups,
taking into account the heterogeneity in the co-integrating relationship. The tests of the first group average the results of individual
country test statistics. However, tests of the second group, pool the statistics along the within-dimension. Pedroni (2004) also showed
that under appropriate normalization, based on Brownian motion functions, the seven statistics follow a normal distribution centered
reduced for N and T are important enough. The results of Pedroni’s (2004) test reported in Table 7 confirm the rejection of the null
hypothesis of no co-integration. Based on the p-values, we thereby conclude that economic growth and its determinants are co-
integrated in the long-run. Thereby, the results of both within and between dimensions statistics show that the alternative hypothe
sis of co-integration should be accepted for the three sub-panels along with the global panel. Based on these findings, we conclude that
endogenous and exogenous variables do have a long-term relationship to all panels.
5. Results and discussion
The four-way linkages between growth-FDI-transport-logistics are estimated by using the GMM estimator. For each panel, the four
models give the estimated coefficients of Eqs. (9)–(12). Further, the results of the empirical evidence are presented in Table 8 (below),
containing the statistics for the three sub-panels. However, the statistics presented in Table 9 refer to all the countries included in the
empirical investigation. In fact, we consider a combination of the three sub-groups that provides one panel named ‘global panel’.
5.1. For Europe and Central Asia
For the panel of European and Central Asian countries (ECA), results show that economic growth as a dependent variable in Model-
1 was significantly affected by FDI inflows. Indeed, a magnitude of 0.2001 means that economic growth increases by 0.2001% if FDI
Secondly, foreign direct investment (FDI) is a key driver of economic growth, especially in developing countries where access to capital, technology, and markets is crucial for
industrialization and development. Understanding the relationship between FDI and transportation/logistics infrastructure is essential for policymakers and investors seeking to
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identify opportunities for attracting and leveraging FDI to enhance infrastructure development and economic growth.
Furthermore, the paper aims to empirically examine these dynamic linkages using data from developing countries. By analyzing real-world data and applying empirical
methods, the paper seeks to provide evidence-based insights into the relationships between transport, logistics, FDI, and economic growth. This empirical evidence not only
contributes to academic knowledge but also informs policy formulation and investment decisions aimed at promoting sustainable development and inclusive growth.
Table 4
Panel unit root analysis.
Variable Levin-Lin-Chu (LLC) Im-Pesaran-Shin (IPS)
At Level First difference At Level First difference

***
lnYt − 2.7148 (0.2150) − 4.6214 (0.0038) − 2.5223 (0.5022) − 2.1552 (0.0212) **
lnFt − 4.0339 (0.1605) − 6.6247 (0.0000) *** − 4.3552 (0.1720) − 6.4813 (0.0000) ***
***
lnTRt − 4.5778 (0.1070) − 8.1248 (0.0000) − 3.1108 (0.4515) − 4.1008 (0.0027) ***
lnGt − 2.8013 (0.2071) − 3.2234 (0.0146) *** − 3.0097 (0.44310) − 5.0412 (0.0018) ***
lnOt − 5.2738 (0.1027) − 7.1492 (0.0000) *** − 0.7880 (0.6280) − 4.5521 (0.0023) ***
***
lnEt − 1.4896 (0.3771) − 5.6849 (0.0027) − 5.7207 (0.1513) − 6.6167 (0.0000) ***
lnUt − 2.6483 (0.3238) − 4.8026 (0.0038) *** − 1.7785 (0.6120) − 4.7491 (0.0021) ***
lnFDt − 3.1338 (0.2014) − 6.1473 (0.0000) *** − 4.4237 (0.1640) − 2.4022 (0.0166) **
***
lnKt − 3.7004 (0.1864) − 5.4614 (0.0033) − 0.7338 (0.6262) − 6.9456 (0.0000) ***
lnIt − 4.8160 (0.1037) − 7.1148 (0.0000) *** − 5.4026 (0.1540) − 5.1482 (0.0011) ***
Notes: P-values in parentheses, ***, ** significant at 1% and 5% levels respectively.
Table 5
Cross-sectional dependence analysis.
1 2 3
lnYt 40.1259 (0.0000) 33.1418 (0.0000) 160.1470 (0.0000)

lnFt 50.1483 (0.0000) 46.1480 (0.0000) 210.1480 (0.0000)
lnTRt 45.4171 (0.0000) 38.4482 (0.0000) 163.1497 (0.0000)
lnGt 60.1488 (0.0000) 52.1549 (0.0000) 168.4182 (0.0000)
lnOt 41.7870 (0.0000) 28.0015 (0.0000) 145.7480 (0.0000)
lnEt 39.7480 (0.0000) 46.7412 (0.0000) 189.1482 (0.0000)
lnUt 37.1250 (0.0000) 40.1548 (0.0000) 177.5828 (0.0000)
lnFDt 42.1590 (0.0000) 38.9568 (0.0000) 147.2599 (0.0000)
lnKt 39.8461 (0.0000) 42.3481 (0.0000) 166.1545 (0.0000)
lnIt 34.5967 (0.0000) 36.0012 (0.0000) 169.1248 (0.0000)
Notes: Pesaran (2004) cross-sectional dependence in panel data models test. Pesaran (2004) CD test for cross-sectional dependence in panel
time-series data. Friedman test for cross-sectional dependence using Friedman’s χ 2distributed statistic. P-values in parentheses. Tests
include the intercept.
Table 6
Unit root analysis with cross-sectional dependence.
Variable Constant Constant and trend
lnYt − 5.9247 (0.0000)*** − 7.2560 (0.0000) ***

lnFt − 3.5510 (0.0121) ** − 3.6841 (0.0017) ***
lnTRt − 3.7012 (0.0118) ** − 3.8845 (0.0015) ***
lnGt − 4.6289 (0.0024) *** − 5.1256 (0.0001) ***
lnOt − 4.1593 (0.0033) *** − 4.9890 (0.0023) ***
lnEt − 5.5988 (0.0000) *** − 5.8710 (0.0000) ***
lnUt − 5.0125 (0.0000) *** − 6.1480 (0.0000) ***
lnFDt − 2.1542 (0.0220) ** − 4.1248 (0.0041) ***
lnKt − 5.9980 (0.0000) *** − 6.4155 (0.0000) ***
lnIt − 2.4896 (0.0180) ** − 3.8801 (0.0015) ***
Notes: P-values in parentheses, ***, **significant at 1% and 5%levels respectively.
inflows increase by 1%. According the World Investment Report (WIR, 2017)3, in France, FDI stock is very crucial for its domestic
economic activity. It has increased from 24.6% to 28.3% of GDP between 2014 and 2016. To develop FDI attractiveness, French
authorities adopted various strategies, allowing the entry of 500 multinationals to set up their home office in Paris.
Similarly, Central and Eastern European countries are also becoming more attractive to FDI by implementing important structural
3
World Investment Report (2017). Investment and the digital economy. United Nations publication 2017. http://unctad.org/en/
PublicationsLibrary/wir2017_en.pdf
Moreover, studying these linkages in the context of developing countries is particularly relevant due to their unique challenges and opportunities. Developing countries often
face constraints related to inadequate infrastructure, limited access to finance, and institutional capacity constraints. Understanding how transportation, logistics, and FDI
285
interact with economic growth dynamics in these contexts can help identify policy interventions and investment strategies tailored to address specific development challenges
and promote inclusive growth.
Overall, the rationale for the paper lies in its potential to deepen understanding, inform policy formulation, and guide investment decisions regarding transportation, logistics,
FDI, and economic growth in developing countries. By providing empirical evidence and insights, the paper contributes to academic scholarship and practical efforts aimed at
fostering sustainable and inclusive development in these regions.
Table 7
Pedroni cointegration test.
ECA panel MENA-SSA panel EAPSA panel Global panel
Tests between dimensions Statistics P-value Statistics P-value Statistics P-value Statistics P-value
V-stat − 4.1259 0.0031*** − 2.1567 0.0253** − 6.7264 0.0000*** − 4.1540 0.0027***

Rho-stat − 4.1246 0.0032*** − 3.1247 0.0134** − 3.4870 0.0112** − 5.4837 0.0000***
Pp-stat − 5.1480 0.0000*** − 3.1255 0.0131** − 3.6488 0.0102** − 5.4870 0.0000***
Adf-stat − 4.9567 0.0005*** − 5.4411 0.0000*** − 4.8870 0.0008*** − 6.1124 0.0000***
Tests within dimensions

Rho-stat − 3.4826 0.0114** − 4.7890 0.0011* − 5.1249 0.0000* − 2.4698 0.0232**
Pp-stat − 5.1548 0.0000* − 5.4867 0.0000* − 4.5528 0.0017* − 3.1590 0.0123**
Adf-stat − 6.4850 0.0000* − 2.9981 0.0220** − 4.3648 0.0021* − 3.1460 0.0125**
Note: Panel cointegration tests include intercept; ***, ** significant at 1% and 5% levels respectively.
reforms that enhance market stability and transparency of business climate. Furthermore, these reforms stimulate the restructuring of
industrial base through appropriate privatization programs. In fact, the various measures they have taken enables them to increase FDI
inflows in these countries, while reinforcing their strong and rapid integration within the European Union. This empirical and positive
relationship between FDI inflows and economic growth has been reported by Li and Liu (2005), Reiter and Kevin Steensma (2010),
Almfraji and Almsafir (2014).
Also, the effect of transport is positive and significant at 1% level. According to the statistics in Table 8, we note that 1% increase in
transport infrastructures leads to enhanced economic growth in Europe and Central Asia by 0.2747%. For example, the Central and
Eastern Europe countries (CEE) have strong economic relationship with Western Europe, which leads to an increase in employment,
while considerably stimulating technology transfer. To improve these relationships, CEE countries develop their transport in
frastructures and update their logistics functions, ensuring the best connectivity between clients and suppliers, while improving their
efficiency and productivity. For Asian countries, local authorities aim to enhance the import and export transactions, while increasing
regional integration by developing their domestic transport systems. These countries have been building dry ports and inland container
parks that have functions similar to those of seaports. These dry ports are strategically located, where various transport networks
converge accelerate transfer of freight between different modes of transport. This in turn accelerates economic activity and sustains
economic development for longer periods. Although for logistics infrastructure, the effect is positive, but statistically insignificant.
Furthermore, the results indicate that economic growth increases by 0.0023% if there is an increase by 1% in ICT infrastructure.
Importantly, we find that energy consumption and trade openness have positive effects on economic growth at 1% level, while the
effect of capital stock is positive and significant at 5%.
Moreover, the statistics of Model-2 demonstrate that FDI inflows increase if economic growth, and transport infrastructures in
crease. A coefficient of 0.3102 and 0.2610 imply that stock of FDI in the host country augments by 0.3102% and 0.2610% if economic
growth and transport infrastructure increase by 1% respectively. These results are in line with Petri (2012), Villaverde and Maza
(2015), and Doytch (2015) studies. Furthermore, the development of logistics infrastructures by 1% leads to a rise of FDI inflows by
0.0098%. In fact, we found that trade openness and capital stock do have positive effects on FDI attractiveness, especially in the ECA
countries. On the contrary, the effect of inflation for the same pool of countries is negative and significant. Indeed, the augmentation of
inflation by 1% causes a decrease of FDI inflows by 0.2147%.
Model-3 presents the influence of the explanatory variables on the variation of transport infrastructures in countries of the first
panel. We did find a positive impact for economic growth, FDI inflows, and logistics. An increase by 1% in these variables develops
transport infrastructures by 0.2732%, 0.2011%, and 0.1552% respectively. Energy use, urbanization, financial development, and
capital stock have positive impact on transport infrastructures, and is statistically significant.
Finally, in Model-4, we found that ICT infrastructures in the ECA countries depend a lot on economic growth at 1% level. An
augmentation of 1% in economic growth does in turn increase logistics infrastructure by 0.3143%. Similarly, FDI inflows positively
affect logistics infrastructure. A magnitude of 0.3381 and 0.1672 implies that logistics infrastructure increases by 0.3381% and
0.1672%, if FDI inflows and transport infrastructure increase by 1% respectively. As regards the impact of trade openness, urbani
zation, and capital, our findings found a positive impact at a level of 1% for urbanization, and at a level of 5% for capital and trade.
Statistics in Table 8 show that there is an increase by 0.2120% in ICT if there is 1% increase in trade openness. Equally, the effect of
capital is significant at the 5% level, leading thereby to a development in ICT infrastructures in ECA economies by 0.1993%, if there is
an increase by 1%. Finally, a coefficient of 0.2474 implies that ICT infrastructures do increase by 0.2474%, if urbanization in the
selected countries increases by 1%.
5.2. For the Middle East, North Africa and Sub-Saharan Africa
As regards the panel of Middle East, North Africa and Sub-Saharan Africa (MENA-SSA), the findings follow the same trend as the
first panel. Model-1 examined the impact of explanatory variables on economic growth. Herein, the impact of FDI inflows has been
positive and significant at 1% level. A coefficient of 0.2240 implies that the economy in these countries augments by 0.2240% each
period if FDI inflows increase by 1%. These empirical results are consistent with Gohou and Soumaré’s (2012) results, but they are
contrary to those of Demir and Duan (2018), Gui-diby and Renard (2015) that report the impact of FDI inflows on the economic growth
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S. Saidi et al.
Table 8
Results for the three sub-panels.
European and Central Asia Middle East, North Africa and Sub-Saharan Africa East Asia, Pacific, and South Asia
Model-1 Model-2 Model-3 Model-4 Model-1 Model-2 Model-3 Model-4 Model-1 Model-2 Model-3 Model-4
Independent lnYt lnFt lnTRt lnGt lnYt lnFt lnTRt lnGt lnYt lnFt lnTRt lnGt
Variable
lnYt 0.3102 0.2732 0.3143 0.2493 0.3261 0.2898 0.3322 0.3663 0.3155
(0.0000)** (0.0002)*** (0.0000)*** (0.0023)*** (0.0000)*** (0.0000)*** 0.0000) *** (0.0000)*** (0.0000)***
lnFt 0.2001 0.2011 0.3381 0.2240 0.1869 0.2414 0.3054 0.1864 0.4113
(0.0201)** (0.0188) ** (0.0000)*** (0.0065) *** (0.0223) ** (0.0044) *** (0.0000)*** (0.0225) ** (0.0000)***
lnTRt 0.2747 0.2610 0.1672 0.1084 0.2669 0.2701 0.2416 0.2604 0.1589
(0.0001)*** (0.0018)*** (0.0251) ** (0.0403) ** (0.0008)*** (0.0003)*** (0.0044)*** (0.0019)*** (0.0283) **
lnGt 0.1552 0.1028 0.0363 0.1046 0.1422
(0.307) ** (0.0471) ** (0.0743) * (0.0420)** (0.0319) **
lnOt 0.2885 0.3251 0.2120 0.2150 0.3781 0.2110 0.3225 0.3286 0.1004
(0.0000)*** (0.0000)*** (0.0135)** (0.0100) ** (0.0000)*** (0.0140) ** (0.0000)*** (0.0000)*** (0.0546) *
287
lnEt 0.3012 0.3140 0.3140 0.3148 0.2982 0.4117

(0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)***
0.3100 0.2474 0.3397 0.2200 0.1208 0.3349 0.1177
(0.0000)*** (0.0029)*** (0.0000)*** (0.0070) *** (0.0337) ** (0.0000)*** (0.0382) **
lnFDt 0.2154 0.2187
(0.0098) *** (0.0081)***
0.2113 0.1815 0.1007 0.1993 0.2480 0.2626 0.3171 0.3012 0.2659 0.2191 0.2136 0.0983
(0.0138) ** (0.0246) ** (0.0502) * (0.0206) ** (0.0025)*** (0.0015)*** (0.000) *** (0.000) *** (0.0012)*** (0.0077)*** (0.0117)** (0.0665) *
− 0.2147 − 0.2694 − 0.1984
(0.0102) ** (0.0006)*** (0.0214) **
Constant 0.3140 0.2849 0.3188 0.4002 0.3322 0.4159 0.2998 0.3620 0.4157 0.6253 0.7483 0.4482
Transportation Research Part A 141 (2020) 277–293

(0.0000)*** (0.000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)*** (0.0000)***
Hansen J-test 27.1594 17.8962 29.1437 22.8407 26.5918 28.1865 17.9718 14.9525 35.4400 29.7830 24.6467 31.8409
(p-value) (0.3914) (0.5962) (0.3742) (0.4011) (0.3954) (0.3875) (0.5184) (0.6252) (0.1780) (0.3518) (0.3998) (0.2776)
AR2 test (p- 0.7770 0.7114 0.2780 0.6620 0.2720 0.3040 0.4890 0.2180 0.6820 0.6000 0.4780 0.4180
value) (0.301) (0.525) (0.752) (0.418) (0.694) (0.748) (0.621) (0.695) (0.694) (0.717) (0.655) (0.705)
Notes: Values in parenthesis are the estimated p-values. The Sargan test refers to the over-identification test for the restrictions in the GMM estimation. The AR (2) test is the Arellano-Bond test for the
existence of the second-order autocorrelation in first differences. ***,**and * significant at 1%, 5% and 10% levels respectively.
Table 9
GMM Analysis for the 46 countries.
Model-1 Model-2 Model-3 Model-4
***
0.2894 (0.0000) 0.3240 (0.0000) *** 0.2998 (0.0000) ***
0.2401 (0.0014) *** 0.1718 (0.0424)** 0.3481 (0.0000) ***
0.2006 (0.0152)** 0.2260 (0.0020)*** 0.1616 (0.0547) *
0.0181 (0.2317) 0.1698 (0.0510)* 0.0248 (0.2062)
0.1989 (0.0255) ** 0.3286 (0.0000)*** 0.1878 (0.0303) **
0.3120 (0.0000) *** 0.3317 (0.0000) ***
0.1780 (0.0413) ** 0.3440 (0.0000) *** 0.1965 (0.0283) **
0.2140 (0.0148)**
**
0.2150 (0.0134) 0.2880 (0.0006)*** 0.2002 (0.0249)** 0.2440 (0.0008) ***
− 0.2007 (0.0151)**
Constant 0.4952 (0.0000) *** 0.3498 (0.0000) *** 0.3148 (0.0000) *** 0.5184 (0.0000) ***
Hansen J-test (p-value) 37.2512 (0.178) 30.1834 (0.350) 17.1901 (0.341) 33.7027 (0.277)
AR2 test (p-value) 0.676 (0.694) 0.637 (0.717) 0.518 (0.683) 0.601 (0.605)
Notes: Values in parenthesis are the estimated p-values. The Sargan test refers to the over-identification test for the restrictions in the GMM esti
mation. The AR (2) test is the Arellano-Bond test for the existence of the second-order autocorrelation in first differences. ***,**and * significant at
1%, 5% and 10% levels respectively.
of African countries are insignificant. In addition, an increase in transport infrastructure by 1% leads to develop the economy of MENA-
SSA countries by 0.1084%.
For logistics, the statistics confirm that ICT infrastructures affect economic growth positively. A 1% increase in logistics infra
structure allows developing the economy by 0.007%. In addition, the results indicate that economic growth is positively affected by
energy consumption. A 1% increase in energy demand causes an augmentation of economic growth by 0.3140% under each period.
The positive co-relationship between economic growth and energy use has also been reported by Omri and Kahouli, (2014) for 65
countries, Magazzino (2016) for the Middle Eastern countries, Shahbaz et al. (2017) for 157 countries, and Ahmad and Du, (2017) for
Iran. In fact, we also found that trade openness and capital stock on economic growth do have a positive and significant impact, but
that urbanization does not significantly affect economic growth.
Model-2 showed that FDI attractiveness depends positively on economic growth, transport, and logistics. A coefficient of 0.2493
indicates that FDI in MENA-SSA countries grows by 0.2493% if economic growth augments by 1%. Similarly, the magnitude of 0.2669
and 0.1028 implies that 1% increase in transport and logistics infrastructure increases FDI by 0.2669% and 0.1028% respectively. In
the same line, Saidi and Hammami (2011) reported the positive impact of transport and logistics infrastructure on FDI attractiveness
for a sample of eight Mediterranean countries from 2000 to 2009. Compared to the ECA panel, it is found that the impact of capital is
significant at 1% level. Thus, a 1% increase in trade openness and capital stock in the MENA-SSA countries, does lead to an increase in
FDI stock by 0.3781% and 0.2626% respectively. On the contrary, for the same pool of countries, the impact of inflation is negative and
significant at 1% level.
In Model-3, we estimate the coefficients of the explanatory variables on transport infrastructures. We find that economic growth
positively affects the development of road networks in MENA-SSA countries. A coefficient of 0.3261 indicates that an augmentation by
1% of the economy allows increasing transport infrastructure by 0.3261%. Similarly, the impact of FDI and logistic function is found to
be positive and statistically significant. It may be noted here that the transport infrastructure increases by 0.1869% and 0.0363% if
there is an augmentation by 1% in FDI inflows and logistics infrastructures respectively. The positive relationship between energy
demand and transport infrastructure is clearly confirmed by the magnitude of 0.3148. A 1% increase in energy demand in MENA-SSA
countries implies the development of transport infrastructure by 0.3148%. Moreover, urbanization, financial development, and capital
stock also have a positive and significant effect on transport infrastructure.
The fourth model confirms the positive impact of economic growth, FDI, and transport infrastructure on the development of lo
gistics infrastructure. Economic growth has a positive impact on ICT infrastructure, which in turn implies that ICT infrastructure grows
by 0.2898%, if economic growth increases by 1%. Also, the coefficients of 0.2414 and 0.2701 imply that logistic infrastructure in
creases by 0.2414% and 0.2701% with an increase by 1% in FDI inflows and transport infrastructure respectively. Moreover, we find
that logistics infrastructure is positively affected by urbanization, capital stock, and trade openness.
5.3. For East Asia, Pacific, and South Asia
The East Asia, Pacific, and South Asia (EAPSA), Model-1 (Table 8) indicates that FDI and transport have a positive and significant
impact on economic growth. A coefficient of 0.3054 implies that a 1% increase in FDI inflows tends to promote economic growth by
0.3054%. Increase of 1% in transport infrastructure causes economic growth by 0.2416% for each period. This result is in line with
Pradhan and Bagchi (2013) for India, and Anam et al. (2016) for Pakistan studies. For logistics infrastructure, the impact on economic
growth is positive and substantial at a 5% significance level. In addition, economic growth in EAPSA panel depends directly on energy
consumption. A magnitude of 0.2982 means that a 1% increase in energy demand causes an economic growth by 0.2982%. For trade
openness and urbanization, the effect on economic growth is positive and statistically significant at 1% and 5% levels respectively.
The second model summarizes the impact of different factors on FDI inflows. First, the impact of economic growth is found to be
positive, since a development of economy by 1% tends to increase stock of FDI by 0.3322%. Transport infrastructure also has a strong
288
effect on FDI. A coefficient of 0.2604 implies that FDI inflows augment by 0.2604%, as transport infrastructure increases by 1%. The
same positive impact is detected for logistics, trade openness, and capital. However, inflation negatively affects FDI attractiveness. The
Model-3 seems to show how different factors actually go on to affect transport infrastructure in EAPSA countries. A positive impact of
economic growth, energy consumption, urbanization, financial development on transport infrastructure is noted at 1% significance
level. The development of these variables by 1%, leads to enhance road networks by 0.3663%, 0.4117%, 0.3349%, 0.2187%, and
0.2136% respectively. It may be noted that FDI inflows enhance transport infrastructures by 0.1864% for each 1% increase.
The statistics of Model-4 confirm a direct impact of economic growth on logistics infrastructure, which increases by 0.3155%, if
there is an economic growth by 1%. Moreover, we did find a positive relationship between FDI inflows and logistics infrastructure. A
coefficient of 0.4113 indicates that a 1% augmentation in FDI inflows tends to develop ICT infrastructure by 0.4113%. The empirical
results further show that transport infrastructure and trade openness do have a direct and positive effect on logistics infrastructures.
The statistics of 0.1589 and 0.1004 demonstrate that ICT infrastructure may augment by 0.1589% and 0.1004%, if transport infra
structure and trade openness augment by 1%. Importantly, the impacts of urbanization and capital are respectively positive and
significant at 5% and 10% levels.
5.4. For the panel of 46 countries
The empirical estimates for 46 countries in the ‘global panel’ have been reported in Table 9. The results have been estimated by
applying GMM of Arellano and Bond (1991). Model-1 gives the numerical estimates of the impact of FDI inflows, transport infra
structure, logistics infrastructure, energy demand, trade openness, urbanization, and capital stock on economic growth. The FDI inputs
have positive and significant effect on economic growth at 1% level. Further, the results reveal that the augmentation of FDI stock
contributed to the economic growth from 2000 to 2016. The estimated magnitude of transport infrastructure is 0.2006, indicating
thereby that 1% increase in the same would tend to increase economic growth by about 0.2006%. The coefficient of logistics infra
structure is statistically insignificant. For urbanization, trade openness, and capital, the effect on economic growth is seen to be positive
and significant at 5%, while energy consumption is also seen to affect economic growth positively.
In Model-2, we find that FDI inflows into host countries do have a positive and significant impact on overall growth, transport and
logistics infrastructure. A value of 0.2894, 0.2260 and 0.1698 implies that the FDI stock would rise by 0.2894%, 0.2260% and 0.1698%
only if economic growth, transport and logistics infrastructure increase by 1%. Trade openness also seems to have had a positive
impact, implying thereby that the host countries could look to develop their competitiveness to attract FDI, provided they increases
their ‘economic openness’. Compared to the three sub-groups, inflation has always the same negative impact on FDI attractiveness. The
estimated coefficient of − 0.2007 implies that FDI inflows decrease by − 0.2007% if inflation increases by 1%.
Model-3 summarizes the impact of different factors on transport infrastructure development. Under economic growth, the
Fig. 1. Causal relationships among economic growth (Y), FDI, transport infrastructure (TR) and logistics function (LG) in (a) Europe and Central
Asia, (b) Middle East, North Africa, and Sub-Saharan Africa, (c) East Asia, Pacific, and South Asia, and (d) global panel.
289
magnitude of 0.3240 implies that 1% increase in the same directly generates an improvement of road networks by 0.3240%. This in
turn implies that a rapid economic growth needs developed transportation infrastructure capable of ensuring the fluidity of different
flows. The results note that 1% increase in FDI inflows leads to rise in transport infrastructure by 0.1718%. In addition, they show that
energy consumption and urbanization have positive impacts and significant at 1%. A magnitude of 0.3317 and 0.3440 indicate that
transport infrastructures may grow by 0.3317% and 0.3440% if energy demand and urbanization increase by 1%. The impact of
financial development and capital are positive and statistically significant at 5%. For logistics infrastructure, we find that 1% increase
leads to augment transport infrastructure by 0.0248%.
The last model presents the conclusions whereby the effect of economic growth, FDI stock and capitals are shown to be positive and
significant at the logistic function of level 1%. Augmentation of 1% in these factors does tend to develop logistics infrastructures by
0.2998%, 0.3481%, and 0.0244% respectively. The effect of trade openness and urbanization on the other hand, is positive and
significant at 5%. Finally, we have a coefficient of 0.1616, which implies that a 1% increase in transport infrastructure tends to
augment logistics infrastructure by 0.1616%.
The four figures (given below) summarize different relationships between economic growth, FDI, transport, and logistics infra
structure (Fig. 1). For the ECA panel, the results (Fig. 1a) show a positive bi-directional relationship between economic growth, FDI,
and transport infrastructure. Economic growth significantly affects logistics infrastructure, but the same is not true from the other end.
Another unidirectional relationship is from FDI to logistics infrastructure. For transport infrastructure and logistics infrastructure, the
relationship is positive and significant from both directions. Fig. 1b indicates that in the MENA_SSA countries, the same bi-directional
relationships exist between economic growth, FDI inflows, and transport infrastructure. However, logistics infrastructure is positively
and significantly affected by economic growth, FDI inflows and transport infrastructure without any feedback effect. The EAPSA panel
(Fig. 1c) shows that all the relationships are positive and significant bi-directionally for all variables except one, i.e., from logistics
infrastructure to transport infrastructure. Finally, Fig. 1d shows that the global panel has the same results as the EAPSA panel. In fact,
economic growth, FDI inflows, and transport infrastructure do have a positive and significant impact amongst them. The relationship is
unidirectional from economic growth, FDI, and transport infrastructure to logistics infrastructures.
6. Conclusion and policy implications
This study has investigated the relationship between economic growth, FDI, transport infrastructure, and logistics infrastructure in
46 developing countries from 2000 to 2016 (17 years). The global panel was divided into three sub-panels, such as European and
Central Asian countries (ECA), Middle East, North African, and Sub-Saharan countries (MENA-SSA), and East Asian, Pacific, and South
Asian countries (EAPSA). The relationships between the variables have been estimated by applying the GMM estimator. The empirical
results show a bi-directional relationship between economic growth, FDI inflows, and transport infrastructure for all panels. Economic
growth in itself has a positive impact on logistics function without any feedback effect for ECA and MENA-SSA countries. For the
EAPSA countries, the bi-directional relationship between economic growth and logistics function is positive and statistically signifi
cant. Moreover, the results show that the relationship between FDI inflows and logistics infrastructure is bi-directional for the MENA-
SSA and EAPSA panels, and unidirectional from FDI inflows to logistic function, for ECA panel. Finally, the causal relationship between
transport and logistics infrastructure is also bi-directional for the ECA and MENA-SSA panels, and unidirectional for transport
infrastructure to logistics infrastructure for the EAPSA panel.
In context of policy implications, we find that there is indeed a positive relationship between economic growth and FDI inflows in
all countries, which does affirm the growth-hypothesis. Additionally, it confirms the positive impact of FDI on domestic economic
activity in recipient countries. It may be noted here that developing countries may choose to adopt new approaches to formulate their
respective strategies to enhance competitiveness to attract FDI. Nevertheless, host countries do need to eliminate legal and policy
barriers and create positive climate to facilitate the entry of foreign capital. Furthermore, they could improve the investment climate
for foreign and local investors by developing laws and establishing reasonable industrial policies to guide industry distribution of FDI
stocks. Additionally, they might also look to develop their investment policies by providing easy access to inputs, technology, financing
and by streamlining the procedures associated with relative infrastructure. In other words, a set of instruments such as economic,
fiscal, regulatory, and technological should be applied by governments to control driving factors of economic growth.
The growing impact of transport on economic development pushes governments to improve transport and logistics sustainability by
taking a ‘Global and integrated approach’. In addition, governments in selected countries could look to create corridors for trans
porting goods, facilitating the same with modern ICT and logistics infrastructures (e.g., warehouses, connectivity with other local and
international ports). As the results show a positive relationship of FDI, logistics and transportation infrastructure, it alludes to the fact
that it is indeed the government’s responsibility to develop urban logistics centers to encourage delivery and collection of goods in
towns and city centers, while reducing congestion and environmental negative externalities.
Specifically for the SSA-MENA countries, the relationship between economic growth, FDI and transport infrastructure is positive
and statistically significant. This positive association implies that the North African countries have great opportunity to increase FDI
inflows by developing their transport systems. On the one hand, developing maritime transport would positively affect European FDI,
which in fact is considered as an engine of economic development. These investments in turn would not only accelerate technology
transfer, create jobs, but also improve the competitiveness of domestic firms. On the other hand, an efficient railways transport is able
to stimulate significant commercial exchange between the four North African countries. Furthermore, the policy makers in the North
African countries should adopt various strategies to develop an effective intermodal transport system. Additionally, North African
countries can also play a crucial role in international commercial exchanges between the European and Sub-Sahara African countries
through the upgradation of ports to international standards, developing logistics platforms, and improving the land transport systems.
290
Similarly, the Central and Eastern European countries may develop their rail transport systems to decrease the freight transport costs
and augment the competitiveness of their firms. Moreover, by building a developed intermodal transport system, Central and East
European countries could jointly play an important role in two-way trade between Western Europe and Asia.
Importantly, developing countries could take various measures to promote sustainable freight transport systems by improving
energy efficiency and reducing road transport and corresponding emissions. In the same order of ideas, the positive relationship
between transport and energy demand show that developing countries could include main measures, switching thereby to more
sustainable (ecological) modes of transport, such as rail and maritime transport. They could also look to develop policies on ecological
transport; introduce highly modernized transportation and road systems. For example, they could introduce more electric and artificial
intelligence-based vehicles, while building roads that automatically charge the vehicles. Examples of such development have been
emerging from developed countries; developing countries therefore have an opportunity to learn from them and introduce such in
novations, as they are still evolving. These innovations in turn would result in energy efficiency, reduce CO2 emissions and air
pollution, and encourage the adoption of more intelligent practices for transportation and logistics management.
The positive and insignificant impacts of logistics on FDI attractiveness imply that the development of logistics infrastructure is a
key to attract foreign companies. Our results provide useful implications for the governments of these countries, whereby we propose
the host countries to expand their investments in logistics infrastructure to generate FDI inflows. These investments would certainly
strengthen the economic growth and the entry of multinational companies (Sy et al., 2016). Furthermore, their effective policies and
relative regulations for logistics infrastructure would positively affect economic growth. Finally, in the host countries, the facilitation
of training and education to logistic professionals can further strengthen their resources and dynamic capabilities interlinked with the
underlying factors embedded in our studies.
Declaration of Competing Interest
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to
influence the work reported in this paper.
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Transportation Research Part A 141 (2020) 277–293

Contents lists available at ScienceDirect

Transportation Research Part A

Dynamic linkages between transport, logistics, foreign direct

2.1. Transport infrastructure, logistics and economic growth

2.2. Logistics and ICT relationship

3.1. Sample and sample characteristics

3.2. Variable identification

Y Real gross domestic product Constant 2010 US$

3.3. Modeling and estimation technique

3.3.1. Model specification

lnYt = α0 + α1 lnFt + α2 lnTRt + α3 lnGt + α4 lnEt + α5 ln Ot + α6 ln Ut + α7 ln Kt

3.3.2. Estimation technique

lnYt 3963.0311 4031.6402 86256.8807 56.6852 3297.1947 − 0.1821 4.7868

Note: () shows probability values.

5. Results and discussion

5.1. For Europe and Central Asia

At Level First difference At Level First difference

Notes: P-values in parentheses, ***, ** significant at 1% and 5% levels respectively.

lnYt 40.1259 (0.0000) 33.1418 (0.0000) 160.1470 (0.0000)

lnYt − 5.9247 (0.0000)*** − 7.2560 (0.0000) ***

Notes: P-values in parentheses, ***, **significant at 1% and 5%levels respectively.

V-stat − 4.1259 0.0031*** − 2.1567 0.0253** − 6.7264 0.0000*** − 4.1540 0.0027***

Tests within dimensions

lnEt 0.3012 0.3140 0.3140 0.3148 0.2982 0.4117

Transportation Research Part A 141 (2020) 277–293

5.3. For East Asia, Pacific, and South Asia

5.4. For the panel of 46 countries

6. Conclusion and policy implications

Declaration of Competing Interest

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Notes: P-values in parentheses, *, significant at 1% and 5% levels respectively.

lnYt − 5.9247 (0.0000)* − 7.2560 (0.0000) *

Notes: P-values in parentheses, *, significant at 1% and 5%levels respectively.

V-stat − 4.1259 0.0031* − 2.1567 0.0253 − 6.7264 0.0000* − 4.1540 0.0027*