83rd International Atlantic Economic Conference

March 22 - 25, 2017 | Berlin, Germany

International trade logistics through a data envelopment analysis: Freight transportation infrastructure case

Friday, 24 March 2017: 14:30
America Zamora-Torres, PhD , Michoacan University of Saint Nicholas of Hidalgo, Morelia, Mexico
Michelle Hurtado-Pantoja, MBA , Michoacan University of Saint Nicholas of Hidalgo, Morelia, Mexico
Trade logistics involve key steps to facilitate international trade. In this regard, freight transport infrastructure has an important role in international trade efficiency. The aim of this research is to calculate the efficiency levels of 27 countries. We implement a Dynamic Data Envelopment Analysis Network (DEA) model or non-parametric technique DEA Network for the year 2014, using data from databases of international organizations including the World Bank (WB), the Organization for Economic Co-operation and Development (OECD), and the World Trade Organization (WTO). International trade logistics involve a network of different steps in order to achieve international trade in a timely fashion and in the best way possible. That is why the study requires a model with a dynamic approach that acknowledges the existence of an inter-temporal relationship between the inputs used and the resulting outputs. In the first stage, the inputs are the investment and technical infrastructure variables of freight transportation, represented by the indicators road length; road density; motorways; and  investment in transport, warehousing, and infrastructure. The outputs are logistics cost, quality and time. In the second stage, the outputs are the volume and value of international trade cargo on freight transport.

The results show that Germany, Argentina, Singapore, Hong Kong, China, the United Kingdom, Thailand, Brazil, Brunei and Costa Rica were the countries with the highest levels of efficiency in freight transportation infrastructure, while the least efficient country was India with 13%. The results also indicate that the great majority of the analyzed countries show inefficiency in the use of resources, and are not achieving maximum optimization revenue. These results also show the importance of implementing strategies that lead to progressive efficiency in international freight transportation infrastructure –with the aim of strengthening investment in infrastructure– and labor policies that contribute to better training of employed personnel.

Keywords: Dynamic, DEA, Freight transportation, logistics.