Effects of the Certification System of Integrated-Logistics Companies on Total Factor Productivity of the Logistics Industry

The certification system of integrated-logistics companies were introduced in order to enhance global competitiveness of the logistics industry, to establish global logistics networks, and eventually to foster global logistics companies. Firm-level total factor productivity has been estimated to determine whether the certified system performs well. It is revealed that TFP growth in the Korean logistics industry after 2004 is lower than that before 2004. In addition, median and variance tests indicate that there is no difference between TFP growth of the certified integrated-logistics companies and non-certified logistics companies. This indicates that the certified system is not effective to perform original objective. The main reason for this is inferred that the benefits of the certified system is not effective and substantial.