Journal of Korea Trade

Korea Trade Research Association (한국무역학회)
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A Study on the Causal Relationship between Logistics Infrastructure and Economic Growth: Empirical Evidence in Korea

  • Wang, Chao (School of Economics and Management, Chang'an University) ;
  • Kim, Yul-Seong (Department of Logistics System Engineering, Korea Maritime and Ocean University) ;
  • Wang, Chong (Department of Shipping Management, Graduate School, Korea Maritime and Ocean University) ;
  • Kim, Chi Yeol (Division of Shipping Management, Korea Maritime and Ocean University)
  • Received : 2020.09.06
  • Accepted : 2020.12.20
  • Published : 2021.02.28
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Abstract

Purpose - This paper investigates the causal relationship between logistics infrastructure development and the economic growth of Korea. Considering the industrial and economic structure of Korea, it is likely that logistics infrastructure is positively associated with the economic growth of the country. Design/methodology - The causal relationship between logistics infrastructure and economic development is estimated using Vector Autoregressive (VAR) and Vector Error Correction Model (VECM) considering long-run equilibrium between the two factors. To this end, a dataset consisting of 7 logistics infrastructure proxies and 5 economic growth indicators covering the period of 1990-2017 is used. Findings - It was found that causality, in general, runs from logistics infrastructure development to economic growth. Specifically, the results indicate that maritime transport is positively associated with the economic growth of Korea in terms of GDP and international trade. In addition, other modes of transport also have a positive impact on either the GDP or international trade of Korea. Originality/value - While existing studies in this area are based on either regional observations or a specific mode of transport, this study presents empirical evidence on causality between logistics infrastructure and the economic growth of Korea using a more comprehensive dataset. In addition, the findings in this paper can provide valuable implications for transport infrastructure development policies.

Keywords

Acknowledgement

This work was supported by the 4th Maritime Port Logistics Training Project from the Ministry of Oceans and Fisheries (Republic of Korea), the Korea Maritime And Ocean University Research Fund, the Humanities and Social Science Fund of Ministry of Education of China (No.18YJC790158), the Social Science Planning Project of Shaanxi Province, China (No.2019D016), National Social Science Found of China (20BJY179), the Science and Technology Planning Project of Shaanxi Province, China (No.2020JQ-396), and the Fundamental Research Fund for the Central Universities, China (CHD No.300102231666).

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