The effect of logistics capability, information technology implementation and innovation ability on road transportation logistics performance.

The globalization era makes business people today hustle and bustle doing their trade boundlessly. Every trade needs logistics services to cater their activities either for local or international business. Among the services, road transportation logistics service is seem very vital in supporting other types of logistics transportations in order to complete the logistics cycle. Hence, this phenomenon has created severe congestions which then affect business performance of logistics service provider (LSP) firms especially in terms of delivery delay and increment in operating cost. Due to these issues, this study has adapted a model, investigating how capability of LSPs, IT implementation and innovation capability relate with performance of road logistics transportation. Additionally, this study also measured the moderating effect of firm size on the examined relationships. Since previous literature found that the East Coast region of Peninsular Malaysia faced with the congestions as a result of busy trade, this research is tempted to investigate the region with the intention to provide latest report about the situation there, thus helping the East Coast region to expand their potential, as planned by the East Coast Region Development Council. Since this research is using quantitative method, 210 questionnaires were distributed to LSP firms in the desired research areas. With the final of 81 usable questionnaires (38.57%), the data was analysed by using SPSS. The results found that the capability of LSPs and innovation capability have positive significant relationships with firm performance. IT implementation however produce “productivity paradox” phenomenon, parallel with previous findings. Meanwhile, in terms of moderating effect of firm size, the results found that firm size moderates the relationship of capability of LSPs and firm performance. The relationship is found stronger in small firms compared to large firms. Nevertheless, there is no moderating effect found for the relationships of IT implementations and innovation capability with firm performance. The results of this study bridge the gaps of previous literature which lack of logistics literature in Malaysian context, especially in East Coast region. Moreover, this study is the first model using firm size as a moderator variable in the logistics research. Therefore, the results fill this gap and contribute importantly to the body of knowledge. Going further, the study also gives latest information on logistics performance of the East Coast region. This is very important to the potential investors, as their guidelines to invest in the region, either local or foreign. Last but not least, the study might be beneficial for our government to consider new improved policy if needed in order to enhance the logistics performance in Malaysia, thus could stand steadily with other developing countries in the world.