Countertrade Transactions: Theory and Evidence

Richard E Caves and Dalia Marin

Economic Journal, 1992, vol. 102, issue 414, 1171-83

Abstract: Countertrade transactions may cover 20 percent of international trade yet are little researched. Testing several coherent models on 230 transactions (mainly East-West), the authors find (1) strong evidence that they effect price discrimination for Western exporters; (2) no support for a model resting on sticky disequilibrium prices; (3) limited support for a model of efficient revelation of unestablished qualities of countertraded goods; (4) evidence of bargaining power's effect on outcomes in the bargaining range; and (5) evidence that participants engage in repeated countertrade transactions that do not rest on transitory conditions. Copyright 1992 by Royal Economic Society.

Date: 1992
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Working Paper: Countertrade transactions: theory and evidence (1992)
Working Paper: Countertrade Transactions: Theory and Evidence (1992)
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