Countertrade and types of Countertrade

Countertrade is the practice in international merchandise of buy offing for goods in a leap other than by unwaveringly nifty (Oxford, 2002). It can also be described as an alternate means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent (Hill, 2006). In most cases forestall trading takes place where a participation in a rural area that has little extraneous up-to-dateness wants to acquire goods from a ships order in another country. As the company cannot obtain the charm currency to purchase the goods it wants, it offers goods in call up for the goods it needs (Leader et al, 1990) Countertrade minutes are on the increase. According to due west (2002), countertrade flips up an estimated 20 percent of all world trade. Hence, a significant meat of international transactions now need some form of countertrade agreement. This is especially so in the communist countries and also rising markets where th e availability of acceptable hard currency is poor (Reynolds, 2006). Studies highlight the role that countertrade may play in helping foreign firms develop relationships with developing countries. Developing melody relationship in such countries may be hindered by their lack of interchange or poorly convertible currency. hostile firms, however, may be keen to go in rapidly to exonerate first promoter advantages (Bridgewater et al, 2002).

According to Cateora (et al, 2006), countertrade is a pricing prick that every international vendor must be desex to employ, and the for astoundingness to accept a counter trade will often give the company a competit! ive advantage. If a company is unwilling to enter a countertrade agreement, it may resort an exporting opportunity to a competitor that is willing to make a countertrade agreement. Given the problems that more emerging markets have short of hard currency to pay for their purchases and they want to pay with other... If you want to get a practiced essay, order it on our website: BestEssayCheap.com

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