Economic Development and Logistic performance: The Impact of Human Development and Economic Growth on a Country’s Logistic Performance: Evidence from the EU Member States

Abstract

Our study aims to identify the impact that both economic growth and human development have on the logistic performance of the EU member states. When discussing the economic development of a country, the human and economic growth components tend to be separated. This research aims to fill this gap by integrating both perspectives into the comprehensive variable of economic development. Utilising a linear regression model, the study uses economic development as a composed independent variable, containing both the human development index and the GDP per capita (as the main indicator for economic growth), while the logistics performance index (LPI) is considered the dependent variable. Based on the results, both independent variables of the model explain up to 54% from the variation of the LPI in the EU member states. Furthermore, the results of the research indicate that the strongest correlation is identified between the human development index and logistics performance index (0.73). The study explores how economic growth and advancements in human development metrics enhance the efficiency and effectiveness of national logistics systems. Findings suggest that increased economic development is closely linked to improved logistics infrastructure, enhanced trade facilitation, and greater supply chain dependability. Furthermore, human development – assessed via education, health, and social welfare – arises as a crucial factor influencing logistics performance, underscoring the importance of human capital in facilitating sustainable transportation and trade systems. The results highlight the significance of combining economic and social development strategies with logistics policies to improve competitiveness and connectivity in the EU.