Effect of logistics performance on transport environmental quality: Comparative insight from Sub-Saharan Africa and OECD markets

Abstract

The logistics industry is among the top threats to the sustainability despite its valuable contribution to trade and growth. Despite previous efforts on the impact of logistics performance (LP), its role in driving sustainability within the transport sector is less discussed. Also, while it is generally anticipated that the impact of LP may vary depending on the levels of economic development, there has been no empirical study in this regard. This study therefore attempts to bridge these gaps by comparing between less developed economies; Sub-Saharan Africa (SSA) and developed economies (OECD). Panel dataset between 2007 and 2018 for 24 SSA countries and 34 OECD economies. The Generalized Method of Moments estimators were employed and findings showed a positive effect of logistic efficiency on transport sustainability. The findings revealed no significant variation within the economies. Even though the gravity of the effect remain higher in SSA, LP was found to worsen transport sustainability in both economies. Additionally, we noted only the timeliness of logistics service out of the six (6) sub-dimensions of LP significantly increases CO2 from transport. The findings offers a compelling insight which contradicts conventional wisdom that situations in advanced economies are always highly better. Practically, the findings implies that, regardless of the level of development in the economy, supply chain or logistics activities continue to be far from de-carbonization in both economies. Governments must therefore double efforts towards decarbonizing of modern supply chains though green logistics, if the Net Zero Emission target of 2025 is to be achieved.