The relationship between logistics sector performance and foreign trade

International trade is one of the main determinants of global economic growth. Countries trade to increase their domestic products' sales in global markets, and foreign trade has become an essential economic growth tool, especially for developing economies. The trade volume between two countries naturally depends mostly on the production quality and competitiveness of the exporting country and on the needs of the importing country and factors that facilitate trade and contribute to reducing costs. With globalization and increasing competition, logistics has become one of the most critical elements of international trade. The growth of trade volume and the importance of international logistics as a trade facilitator for economic growth have been among the most discussed topics in the literature. This study's primary purpose is to evaluate the impact of logistics performance on foreign trade in the OECD and low-middle-income countries. For this purpose, the effect of logistics performance on export and import volume was investigated using data between 2007 and 2018. To do so, static panel data analysis was employed on the Logistics Performance Index (LPI), which was created by the World Bank, and we evaluate the status of the logistics industry among countries comparatively. The results show that logistics performance positively affects exports both in OECD countries and low-middle-income countries. On the other hand, it was concluded that logistics performance did not affect both country groups' imports.