The impacts of port infrastructure and logistics performance on economic growth: the mediating role of seaborne trade

TLDR

Investment in improving port infrastructure quality and its economic contribution is often questioned by politicians, investors, and the public. This study empirically investigates the broader economic contribution of seaborne trade from the perspective of port infrastructure quality and logistics performance across 91 seaport countries. Using a structural equation model, the authors provide empirical evidence of the economic impacts of port infrastructure quality and logistics performance, and conduct a multi‑group SEM comparing developed and developing economies. The results show that continuous improvement of port infrastructure quality is vital for developing countries, as it enhances logistics performance, increases seaborne trade, and boosts economic growth, though this association weakens as these countries become richer.

Abstract

Considering 91 countries with seaports, this study conducted an empirical inquiry into the broader economic contribution of seaborne trade, from a port infrastructure quality and logistics performance perspective. Investment in quality improvement of port infrastructure and its contribution to economy are often questioned by politicians, investors and general public. A structural equation model (SEM) is used to provide empirical evidence of significant economic impacts of port infrastructure quality and logistics performance. Furthermore, analysis of a multi-group SEM is performed by dividing countries into developed and developing economy groups. The results reveal that it is vital for developing countries to continuously improve the quality of port infrastructure as it contributes to better logistics performance, leading to higher seaborne trade, yielding higher economic growth. However, this association weakens as the developing countries become richer.