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.
Empirical analysis and findings
Multi group analysis
A useful extension of the SEM is multi-group analysis, which allows for the investigation of model fit of a specific model for different groups. Some studies have compared different groups in terms of inequality. Due to the immense inequality of regional economic development, Chu and Li et al. compared the impact of logistics development on regional economic growth of China for coastal provinces and inland provinces. Similarly, port infrastructure quality, logistics performance and seaborne trade may have varying impact on different economies of the world. Therefore, the sample of 91 countries has been divided into two groups: developed and developing economies. The World Bank classification of country economics was used to group the countries. Based on World Bank classification, countries with gross national income (GNI) per capita higher than 12,475 USD were considered as developed economies (N = 103), while others with GNI per capita below 12,475 USD were considered as developing economies (N = 125).
The goal of multi-group analysis is to compare the means or regression coefficients across groups, and this requires that measurement of variables used are equivalent across groups. This is usually done by comparing models with equality constraints on different parameters across groups with the configural model (that is, a reasonable multi-group SEM without any invariance constraints). A comparison between this configural model and other models with different equality constraints is depicted in Table 5.
| Model(s) | Δχ2 | Δdf | ΔCFI | ΔRMSEA | P value |
|---|---|---|---|---|---|
| MG: Configural (χ2 = 182.38) | – | – | – | – | – |
| MG Vs. MG2: Equal loadings | 10.21 | 6 | 0.003 | 0.002 | 0.12 |
| MG Vs. MG3: Equal intercepts | 30.07 | 7 | 0.014 | 0.008 | < 0.05 |
MG multi-group model, Δdf change in degrees of freedom, ΔCFI change in Comparative Fit Index, ΔRMSEA change in Root Mean-Square Error of Approximation
As the difference between the configural and equal factor loadings model is not statistically significant, metric invariance is established. Therefore, comparison of regression coefficients between the developed and developing economy group can be conducted. Table 6 presents the regression coefficients of the multi-group SEM for developed and developing economies.
| Developed Economies | Developing Economies | |||
|---|---|---|---|---|
| Regression paths | Std. Estimates | C.R. | Std. Estimates | C.R |
| QPI → LP | 0.52*** | 6.99 | 0.31*** | 4.08 |
| QPI → ST | 0.03 | 0.34 | 0.09 | 1.43 |
| QPI → NE | 0.29* | 2.34 | −0.10 | − 1.14 |
| QPI → LP → NE | 0.14 | 1.86 | 0.04 | 1.05 |
| QPI → ST → NE | −0.001 | − 0.28 | 0.03 | 1.24 |
| QPI → LP → ST → NE | − 0.01 | −0.42 | 0.09* | 2.35 |
| LP → ST | 0.51*** | 4.46 | 0.76*** | 8.15 |
| LP → NE | 0.28 | 1.89 | 0.14 | 1.20 |
| LP → ST → NE | − 0.02 | −0.42 | 0.28** | 2.73 |
| ST → NE | − 0.07 | −0.58 | 0.37** | 2.70 |
Std. Estimate standardized estimates,
C.R. critical ratio
Model -fit: χ2 (68) = 132.33, AGFI = 0.99, CFI = 0.97, TLI = 0.96, RMSEA = 0.09, SRMR = 0.05
*p < 0.05, **p < 0.01, ***p
< 0.001
The multi-group SEM demonstrates good model fit as the ratio of χ2 and degrees of freedom is below three (that is, 132.33/68 = 1.95). All other fit indices, such as CFI, TLI, AGFI, RMSEA, and SRMR, are also within the recommended level. The findings of the multi-group analysis are remarkable. Quality of port infrastructure has a positive effect on logistics performance in both developed and developed economies, but the quality of port infrastructure affects the national economy only in developed economies. However, the mediated effect of port infrastructure quality on the national economy through logistics performance and seaborne trade is significant in developing economies. Furthermore, logistics performance has a positive effect on the national economy for both developed and developing economies.