Assessing Whether Security Shocks Moderate the Logistics Cost–Product Availability Relationship in ECOWAS (1980-2024)

Abstract

The retail markets in ECOWAS are still characterized by periodic stockout shortages and disparate access to necessary goods, and such forces are often exacerbated when trade corridors are confronted with higher costs, longer delays, and increased insecurity. In addition, the current body of evidence often considers logistics frictions and security disruptions as distinct forces, thereby creating a research gap in the manner by which insecurity might alter the magnitude of the logistics cost effect on retail product availability. This research, therefore, investigates the moderating force of security shocks on the logistics cost-product availability relationship in ECOWAS from 1980 to 2024. Using an annual balanced panel dataset of 15 member countries (Benin, Burkina Faso, Cabo Verde, Cote d'Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo), with indicators sourced from the World Bank, the Uppsala Conflict Data Program (UCDP), and the National Consortium for the Study of Terrorism and Responses to Terrorism (START), the research estimates two-way fixed effects moderation models with a dynamic extension, conducts Hausman specification tests, investigates cross-sectional dependence via the Pesaran CD test, and reports Driscoll-Kraay dependence-robust standard errors. The findings indicate that logistics cost is negatively related to product availability (beta = -0.0233, p = 0.009), and security shocks and the interaction term are statistically insignificant (p = 0.6335 and 0.7843). Consistent with this, the interaction estimate indicates that security shocks do not significantly change the magnitude of the logistics cost effect on product availability in the baseline specification. The research concludes that reducing logistics frictions is paramount in improving availability, and it suggests reducing corridor and border delays, enhancing warehousing and market surveillance, and safeguarding vital trade routes.