Reciprocal mediation effects between Infrastructure and Green Logistics Performance Index on the Balance of Trade of Asian countries

Purpose This study investigates the reciprocal mediation effects between infrastructure (INF) and green logistics performance index (GLPI) on the balance of trade (BOT) in Asian countries from 2013 to 2023. It aims to determine whether infrastructure or green logistics plays the leading role in enhancing trade outcomes under the lens of sustainable development. Design/methodology/approach The study develops a reciprocal mediation model using a dynamic panel dataset comprising 308 observations from 44 Asian countries. A two-step System Generalized Method of Moments estimator is applied to control for endogeneity, serial correlation and heteroskedasticity. The model evaluates both mediation directions: INF → GLPI → BOT and GLPI → INF → BOT. Findings The results reveal that GLPI has a more substantial direct impact on trade balance than INF. Moreover, INF exhibits a more significant mediating role in the GLPI–BOT relationship, accounting for 65.66% of the total effect. In contrast, GLPI mediates only 25.44% of the INF–BOT relationship. The impact of GLPI on INF is also found to be stronger than the reverse. These findings underscore GLPI as the key driver in promoting green infrastructure and enhancing sustainable trade outcomes in Asia. Research limitations/implications A potential measurement overlap exists between GLPI and INF, despite diagnostic tests confirming no severe multicollinearity. The study also faced data constraints, including missing and biennial data reporting, which were addressed through interpolation and PCA adjustments. Further research using Structural Equation Modeling is recommended to capture latent constructs and complex interactions better. Originality/value To the best of the authors’ knowledge, this is one of the first empirical studies to apply a reciprocal mediation framework to simultaneously examine how infrastructure and green logistics influence trade performance in Asia. It offers novel policy insights by highlighting GLPI as both a trade enhancer and an infrastructure catalyst, guiding resource allocation in sustainable trade development.