Logistics agglomeration and logistics productivity in the USA

Logistics agglomeration refers to the geographical concentration of logistics companies and activities. The growing trend of logistics agglomeration in the USA has drawn significant attention from both researchers and policy makers, and its benefits are being widely recognized. However, understanding of logistics agglomeration is still limited. The purposes of this paper are to confirm and quantify productivity gains for the logistics industry from the trend of agglomeration, using the County Business Patterns dataset for the US counties from 2007 to 2014. Panel unit root and panel cointegration test results suggest that a long-run equilibrium relationship between logistics agglomeration and logistics industry productivity exists. We then apply the panel fully modified ordinary least squares regression to estimate the long-run elasticity, and model estimation shows that the elasticity between concentration of logistics activities and industry productivity is 0.039. The study thus provides empirical evidence of the economic benefits associated this phenomenon and suggests that in a long run logistics agglomeration gives rise to higher industry productivity with an elasticity of 4%. In addition, our study results provide justification for policy makers to further invest in logistics agglomeration.