Ports and Shipping
International shipping is an essential part of trade. Countries must have port infrastructure and capacity to allow companies to ship their products to consumers worldwide. Countries with good port infrastructure will attract foreign investment and enable local companies to produce and ship to international markets more efficiently. Read this overview of a study of 91 countries with seaports that examined seaborne trade's economic effects, and how port infrastructure quality and logistics capacity affected trade efficiency.
Conceptual framework
In this paper, the approach used to estimate economic impact of port infrastructure quality is based on the neo-classical economic perspective of transport infrastructures proposed by Lakshmanan. We have assumed that investments into port infrastructure are exogenous, which improve the quality of port infrastructure (QPI). Better QPI (such as modern technologies and equipment) would help improve the logistics performance (LP) of a country (that is, greater reliability, less damage, ability to track and trace shipments, timeliness of delivery etc.). Improved QPI and LP would increase the local and global accessibility of a country, including opportunities to expand markets worldwide. The realisation of those opportunities can be expressed in the form of a country’s total international trade (herein, seaborne trade). Gains from trade can be characterised by improved labor supply, expanded production, diffusion of innovation, competitive pressures, economic restructuring, etc., leading to total factor productivity and GDP growth. To sum up, Fig. 1 presents the conceptual framework of this study.
First, we examine the effects of QPI on LP, seaborne trade (ST), and national economy (NE) based on the conceptual framework in Fig. 1. We then look at the effects of LP on ST and NE, and then the effect of ST on NE is examined. Finally, the indirect (or mediated) effects of QPI on NE via LP, QPI on NE via ST, and QPI on NE via LP and ST are investigated.