Countertrade transactions: theory and evidence

Richard E. Caves and Dalia Marin

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: Countertrade consists of bilateral agreements (usually) between Western industrial enterprises and government agencies or state-owned enterprises in developing countries (LDCs) and centrally planned economies (CPEs), whereby sales of goods by the western exporter are linked contractually to the exporter’s purchases of other goods or services from the countertrade partner. This paper reports findings from a sample of 230 countertrade agreements. We develop an analytical framework that both explains the mutual attraction of countertrade deals to the parties and predicts the terms of trade in individual transactions. Various statistical tests serve to assess assumptions underlying the model, evaluate various predictions and corollaries, and distinguish between certain competing hypotheses about the motives or effects of countertrade transactions. -from Authors

Date: 1992
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Citations: View citations in EconPapers (18)

Published in Economic Journal 414 102(1992): pp. 1171-1183

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Journal Article: Countertrade Transactions: Theory and Evidence (1992)
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Working Paper: Countertrade Transactions: Theory and Evidence (1992)
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