Contribution of Logistics Infrastructure to Industrial Development in China

Abstract

Logistics is considered the “accelerator” of economic development and a steppingstone for sustaining national or regional economic strength. This study explores the impacts of logistics infrastructure on industrial development in China from the following four dimensions: the empirical associations between logistics infrastructureand 1) economic growth, 2) household consumption expenditure, 3) distribution of human resources,and 4) labor productivity within the three strata of industries. We analyze secondary time-series data collected by the National Bureau of Statistics of China and selected variables such as value-added of the logistics industry, freight traffic, freight ton-kilometers, and investment in fixed asset in the logistics industry. We then conduct regression analysis to show the impact of logistics infrastructure on industrial development in China. We find that the logistics infrastructure plays a positive role in promoting the performance of the three strata of industries. However, the value-added logistics had no effect on the labor flow to the secondary and the tertiary industries although the workforce of the primary industry has declined gradually with the increase of the value-added logistics. Finally, the logistics infrastructure also greatly affected the labor productivity since logistics has improved efficiency in material flows.