THE IMPACT OF INITIAL DATA ON THE LOGISTICS PERFORMANCE INDEX ESTIMATION: ESTONIAN AND RUSSIAN STUDY

Background: Logistics activities form a network of services that support the physical movement of goods, trade across borders, and commerce within borders. Well-functioning logistics, with its international trade and transport organisation, is a precondition of comprehensive national competitiveness. The World Bank (World Bank Group) Logistics Performance Index (LPI) is a unique benchmarking tool, used since 2007, providing logistics performance measurement for more than 160 countries. As the LPI is a crucial part of global efforts to understand better logistics performance in the context of increasingly complex supply chains, this indicator must be evaluated objectively and adequately. The current paper focuses on studying subjective aspects within current methodology with regards the possible impact of initial data on the LPI estimation. The research aims to ensure a more objective approach to global and cross-countries performance measurement by studying possible constraints mentioned above.

Methods: The paper presents a quantitative case study research strategy based on the evaluation of LPI in Estonia and Russia. The principal component analysis (PCA) as the primary method of analysis is a multivariate statistical technique that can help identify correlations between data points of the study. The primary data was collected by questioning representatives directly involved in the logistics sector by standardized questionnaire of the World Bank.

Results: The modified methodological approach for evaluating LPI draws attention to comprehensive generalization concerning the improved outcome of the score and the final position of both countries. As a criticism, the significant impact of the answer of just one uncommon respondent to the final score of the LPI can be pointed out.

Conclusions: Further research related to the issue of objective and more advanced estimation of LPI should be a continuous process with the focus on improving the quality of input data for the assessment. In addition to LPI as a primary measure, parallel use of alternative figure for evaluation of the development of logistics on a global scale.