Measuring Regulatory Restrictions in Logistics Services

This study measures the extent of restrictions on trade in logistics services in the ASEAN+6 economies by constructing a logistics regulatory restrictiveness index for each economy that quantifies the extent of government regulations faced by logistics service providers. This is the first study of its kind to construct a regulatory index of the entire logistics sector, which includes the main modes of international transport and customs restrictions. The indices show that large differences exist in the logistics regulatory environment of ASEAN+6 economies. Many of these economies are open to trade in logistics services, while others are relatively restrictive. Malaysia, China, Indonesia, Lao PDR, the Philippines and Vietnam are the most restrictive economies of logistics services in this region. Relatively, Singapore and Australia are the most open economies for trade in logistics services, along with Japan and New Zealand. Preliminary investigations find evidence of negative relationships between logistics regulatory restrictiveness and logistics sector performance, as measured by the World Bank's Logistics Performance Index and its sub-components. These findings support that notion that a less restricted trade environment results in better performance for the logistics sector.