Logistics and economic growth: a panel data approach

Logistics system has been increasingly recognized as one of the important driving forces for economic growth. This paper investigates the long-run relationship between logistics investment and economic growth, using a dataset covering 30 provinces over the period from 1998 to 2007 in China. Conditional convergence model with dynamic panel data approach is employed, and the results of System-GMM estimations show a significant and positive impact of logistics investment on regional economic growth in China, controlling for a number of other factors. Considering the immense inequality of regional economic development in China, a comparative analysis of regional economic growth between coastal provinces and interior provinces is also conducted. The results suggest that interior provincial incomes as a system tend to converge, while there is no evidence supporting the convergences of coastal provincial incomes. The findings also show that the contributive role of logistics investment is greater for undeveloped interior provinces than for coastal provinces.