Relationship Between Culture and Logistics Performance

Logistics is the backbone of trade where logistics performance can effect trade costs and determine countries capabilities to compete globally. One of the ways to measure logistics performance is using the Logistics Performance Index (LPI). Logistics Performance Index is a benchmarking tool developed by the World Bank to help countries identify the challenges and opportunities they face in their performance on logistics. Understanding the relationship between culture and logistics performance has significant policy and international business implications because it suggests that some nations are culturally inclined to live in an environment that fosters logistics performance more than others. This study explores the relationship between Hofstede’s Dimensions of Culture and main indicators of logistics performance index using data from 77 countries. The findings suggest that three of the Hofstede’s Dimensions of Culture, individualism, indulgence and long term orientation exhibit a positive relationship while masculinity, power distance and uncertainty avoidance show negative relationship with certain aspects of Logistics Performance Index.