Exploring Trade Openness and Logistics Efficiency in the G20 Economies: A Bootstrap ARDL Analysis of Growth Dynamics

TL;DR

This paper investigates how trade openness and logistics efficiency influence economic growth in G20 countries, using a bootstrap ARDL model to analyze short and long-term effects from 2007 to 2023.

Contribution

It introduces a bootstrap ARDL-ECM approach to assess trade and logistics impacts on growth, providing robust estimates in complex, small-sample contexts.

Findings

Logistics efficiency significantly boosts economic growth.

Customs and infrastructure improvements enhance trade capacity.

Trade openness positively correlates with growth in G20 economies.

Abstract

This study examines the relationship between trade openness, logistics performance, and economic growth within G20 economies. Using a Bootstrap Autoregressive Distributed Lag (ARDL) model augmented by a dynamic error correction mechanism (ECM), the analysis quantifies both short run and long run effects of trade facilitation and logistics infrastructure, measured via the World Bank's Logistics Performance Index (LPI) from 2007 to 2023, on economic growth. The G20, as a consortium of the world's leading economies, exhibits significant variation in logistics efficiency and degrees of trade openness, providing a robust context for comparative analysis. The ARDL-ECM approach, reinforced by bootstrap resampling, delivers reliable estimates even in the presence of small samples and complex variable linkages. Findings are intended to inform policymakers seeking to enhance trade competitiveness and economic development through targeted investment in infrastructure and regulatory reforms supporting trade facilitation. The results underscore the critical role of efficient logistics specifically customs administration, physical infrastructure, and shipment reliability in driving international trade and fostering sustained economic growth. Improvements in these areas can substantially increase a country's trade capacity and overall economic performance.