Determining Growth Drivers in Container Shipping: A Causality Analysis Between Container Throughput and Liner Shipping Connectivity

Container transportation, facilitated by the development of standardized containers, has revolutionized global trade by increasing efficiency, reducing costs, and enhancing the competitive power of countries. The Liner Shipping Connectivity Index (LSCI) plays a crucial role in measuring the supply side of container transportation, influencing strategic decisions regarding infrastructure investments and policy development to boost global trade integration. Our study aimed to determine whether container throughput drives LSCI or vice versa, using panel data analysis to inform strategic decisions in maritime trade, investment priorities, and policy development. We conduct our analysis using a unique data set covers the years between 2008 and 2021 and consists of 85 countries and 1190 observations. The results obtained revealed that there is a two-way interaction between Container Throughput and LSCI variables, the effects of the variables are positive and reflected after 1 period, and the impact of changes in LSCI on Container Throughput is higher than the opposite situation. This shows that there is a positive feedback loop between the variables and that improvement in any one of them returns as improvement to itself after a certain period.