Evaluation of the relevance measure between ports and regional economy using structural equation modeling

This study examined the relationship between ports (port demand, port supply and value added activity in port) and regional economy from a logistics perspective that provided intellectual support for policy makers in their strategic port related decisions. The major port cities involved in China's five coastal port clusters were taken as the samples in order to conform to the development trend of Chinese port cluster. A structural equation modeling (SEM) approach was employed to test a hypothesized model concerning ports and their regional economy. Results indicated that port supply had a positive effect on port demand. In addition, the findings indicated that value added activity in port had a positive effect on the development of regional economy. However, port supply and port demand were not found to have significantly positive effects on regional economy. Theoretical and practical implications of the research findings for policy makers are discussed. ► This study evaluated the relevance measure between ports and regional economy. ► The approach of structural equation modeling (SEM) was applied in this context. ► Results indicated that port supply had a positive effect on port demand. ► Value added activity in port had a positive effect on the development of regional economy. ► Port supply and port demand were not found to have significantly positive effects on regional economy.