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An export in
international trade International trade is the exchange of capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscul ...
is a
good 125px, In many Western religions, angels are considered to be good beings and are contrasted with devils who are considered evil In most contexts, the concept of good denotes the conduct that should be preferred when posed with a choice betwee ...

good
produced in one country that is sold into another country or a
service Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part of the workload of university faculty * Civil service The civil service is a collective term for a sector of gove ...
provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ''exporter''; the foreign buyer is an ''
importer An import is the receiving country in an export An export in international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of go ...
''. Services that figure in international trade include financial, accounting and other professional services, tourism, education as well as intellectual property rights. Exportation of goods often requires the involvement of
Customs Customs is an authority In the fields of sociology Sociology is the study of society, human social behaviour, patterns of social relationships, social interaction, and culture that surrounds everyday life. It is a social science that u ...

Customs
authorities.


Firms

Many
manufacturing Manufacturing is the creation or Production (economics), production of goods with the help of equipment, Work (human activity), labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector ...
firms begin their global expansion as exporters and only later switch to another mode for serving a foreign market.


Barriers

There are four main types of export barriers: motivational, informational, operational/resource-based, and knowledge.
Trade barrier Trade barriers are government-induced restrictions on international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services ...
s are my laws,
regulation Regulation is the management of complex systems A complex system is a system composed of many components which may interaction, interact with each other. Examples of complex systems are Earth's global climate, organisms, the human brain, infras ...

regulation
s,
policy Policy is a deliberate system of guideline A guideline is a statement by which to determine a course of action. A guideline aims to streamline particular processes according to a set routine or sound practice. Guidelines may be issued by a ...
, or practices that protect domestically made products from foreign competition. While restrictive business practices sometimes have a similar effect, they are not usually regarded as trade barriers. The most common foreign trade barriers are government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services.


Strategic

International agreements limit trade-in and the transfer of certain types of goods and information, e.g., goods associated with weapons of mass destruction, advanced telecommunications, arms and torture and also some art and
archaeological artifact An artifact, or artefact (see American and British English spelling differences#Miscellaneous spelling differences, American and British English spelling differences), is a general term for an item made or given shape by humans, such as a tool o ...
s. For example: *
Nuclear Suppliers Group The Nuclear Suppliers Group (NSG) is a multilateral export control regime and a group of nuclear supplier countries that seek to prevent nuclear proliferation by controlling the export of materials, equipment and technology that can be used to ma ...
limits trade in nuclear weapons and associated goods (45 countries participate). * The
Australia Group The Australia Group is a multilateral export control regime (MECR) and an informal group of countries (now joined by the European Commission The European Commission (EC) is the Executive (government), executive branch of the European Union, ...

Australia Group
limits trade in chemical and biological weapons and associated goods (39 countries). *
Missile Technology Control Regime The Missile Technology Control Regime (MTCR) is a multilateral export control regime. It is an informal political understanding among 35 member states that seek to limit the proliferation of missiles and missile technology. The regime was formed ...

Missile Technology Control Regime
limits trade in the means of delivering weapons of mass destruction (35 countries). * The
Wassenaar Arrangement 350px, Participating states of the Wassenaar Arrangement The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies is a multilateral export control regime (MECR) with 42 participating states including ...
limits trade in conventional arms and technological developments (40 countries). Although the outbreak of COVID-19 sufficiently changed the world economy, people started doing business, so international trade is a key for economic growth. Armenia's economy is dependent on international flows, tourism, and inner production. Competitive export Industries were established which helped the growth of Gross Domestic Product(GDP) to generate financial resources. The market shifted to more efficient exporters, which is the effect of trade liberalization on aggregate productivity. Due to the increase of the number of international business activities through a multilateral trading system, RA Government Program, which was approved in February 2019, the government policy became the objective of economic growth. The period established for the program was 2019-2024. Export quality is developed by developing the export volumes and services.


Tariffs

Tariff A tariff is a tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated el ...
s, a tax on a specific good or category of goods exported from or imported to a country, is an economic barrier to trade. A tariff increases the cost of imported or exported goods, and may be used when domestic producers are having difficulty competing with imports. Tariffs may also be used to protect an industry viewed as being of national security concern. Some industries receive protection that has a similar effect to
subsidies A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the term ...
; tariffs reduce the industry's incentives to produce goods quicker, cheaper, and more efficiently, becoming ever less competitive. The third basis for a tariff involves dumping. When a producer exports at a loss, its competitors may term this ''dumping''. Another case is when the exporter prices a good lower in the export market than in its domestic market. The purpose and expected outcome of a tariff is to encourage spending on domestic goods and services rather than their imported equivalents. Tariffs may create tension between countries, such as the United States steel tariff in 2002, and when China placed a 14% tariff on imported auto parts. Such tariffs may lead to a complaint with the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization An intergovernmental organization (IGO) is an organization composed primarily of sovereign states (referred to as ''member states''), or of other organizations through ...
(WTO) which sets rules and attempts to resolve trade disputes.US/China Trade Tensions
, Darren Gersh. Retrieved 21 May 2006.
If that is unsatisfactory, the exporting country may choose to put a tariff of its own on imports from the other country.


Advantages

Exporting avoids the cost of establishing manufacturing operations in the target country. Exporting may help a company achieve
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and location economies in their home country. Ownership advantages include the firm's
asset In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such a ...
s, international experience, and the ability to develop either
low-cost A no-frills or no frills service or product is one for which the non-essential features have been removed to keep the price low. The term " frills" originally refers to a style of fabric decoration. Something offered to customers for no additional ...
or differentiated products. The locational advantages of a particular market are a combination of costs, market potential and investment risk.
Internationalization In economics, internationalization or internationalisation is the process of increasing involvement of enterprises in international markets, although there is no agreed definition of internationalization. Internationalization is a crucial strategy ...
advantages are the benefits of retaining a
core competence A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel Gary P. Hamel (born 1954) is an American management consultant. He is a founder of Strategos, an international management consulting firm based in C ...
within the company and threading it though the value chain rather than to
license A license (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of variety (linguistics), varieties of the English language native to the United States. Cur ...

license
,
outsource Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally, and sometimes involves transferring employees and assets from one firm to another. T ...
, or sell it. In relation to the eclectic paradigm, companies with meager ownership advantages do not enter foreign markets. If the company and its products are equipped with ownership advantage and internalization advantage, they enter through low-risk modes such as exporting. Exporting requires significantly less investment than other modes, such as
direct investment A foreign direct investment (FDI) is an investment in the form of a Controlling interest, controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by ...
. Export's lower risk typically reduces the
rate of return In finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in t ...
on sales versus other modes. Exporting allows managers to exercise production control, but does not provide them the option to exercise as much marketing control. An exporter enlists various intermediaries to manage marketing management and marketing activities. Exports also has effect on the Economy. Businesses export goods and services where they have a competitive advantage. This means they are better than any other country at providing that product or have a natural ability to produce either due to their climate or geographical location etc.


Disadvantages

Exporting may not be viable unless appropriate locations can be found abroad. High transport costs can make exporting uneconomical, particularly for bulk products. Another drawback is that trade barriers can make exporting uneconomical and risky. For
small and medium-sized enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the Europea ...
(SMEs) with fewer than 250 employees, export is generally more difficult than serving the domestic market. The lack of knowledge of trade regulations, cultural differences, different languages and foreign-exchange situations, as well as the strain of resources and staff, complicate the process. Two-thirds of SME exporters pursue only one foreign market.Daniels, J., Radebaugh, L., Sullivan, D. (2007). International Business: environment and operations, 11th edition.
Prentice Hall Prentice Hall is an American major educational publisher owned by Savvas Learning Company. Prentice Hall publishes print and digital content for the 6–12 and higher-education market. Prentice Hall distributes its technical titles through th ...
.
Exports could also devalue a local currency to lower export prices. It could also lead to imposition of tariffs on imported goods.


Motivations

The variety of export motivators can lead to selection bias. Size, knowledge of foreign markets, and unsolicited orders motivate firms to along specific dimensions (research, external, reactive).


Macroeconomics

In
macroeconomics Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred ...
, net exports (exports minus imports) are a component of
gross domestic product Gross domestic product (GDP) is a monetary Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the ...
, along with domestic
consumption Consumption may refer to: *Resource consumption *Tuberculosis, an infectious disease, historically in biology: * Consumption (ecology), receipt of energy by consuming other organisms in social sciences: * Consumption (economics), the purchasing of ...
,
physical investment Investment is the amount of Good (economics), goods purchased or accumulated per unit time which are not consumed at the present time. The types of investment are residential investment in housing that will provide a flow of housing services over a ...
, and
government spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting A variety of measures of national income and output are used in economics to estimate total economic activit ...
. Foreign demand for a country's exports depends positively on income in foreign countries and negatively on the strength of the producing country's currency (i.e., on how expensive it is for foreign customers to buy the producing country's
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" in the most specific sense is money Money is any item or verifiable record that is generally accepted as payment for goods and services ...

currency
in the
foreign exchange market The foreign exchange market (Forex, FX, or currency market) is a global decentralized Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision makin ...
).


See also

*
Comparative advantage In an economic model In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics) ...

Comparative advantage
* Commodity currency * Commodity Classification Automated Tracking System * Demand vacuum *
e-commerce E-commerce (electronic commerce) is the activity of electronically The field of electronics is a branch of physics and electrical engineering that deals with the emission, behaviour and effects of electrons using electronic devices. Electronics ...

e-commerce
*
Embargo Economic sanctions are commercial Commercial may refer to: * a dose of advertising conveyed through media (such as - for example - radio or television) ** Radio advertisement ** Television advertisement * (adjective for:) commerce, a system of v ...
*
Export-oriented industrialization Export-oriented industrialization (EOI) sometimes called export substitution industrialization (ESI), export led industrialization (ELI) or export-led growth is a trade Trade involves the transfer of goods from one person or entity to a ...
*
Export control Export control is legislation Legislation is the process or product of enrolled bill, enrolling, enactment of a bill, enacting, or promulgation, promulgating law by a legislature, parliament, or analogous Government, governing body. Before an ite ...
* Export performance * Export promotion * Export strategy *
Export subsidy Export subsidy is a government policy to encourage export of goods and discourage sale of goods on the domestic Market (economics), market through direct payments, low-cost loans, tax relief for exporters, or government-financed international advert ...
*
Export Yellow Pages The Export Yellow Pages (EYP), was a multi-media trade and promotion resource for exporters that provides U.S. companies, exporters and export related service providers across all industries a convenient way to engage in export promotion and establi ...
*
Free trade Free trade is a trade policy A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade International trade is the exchange of capital, goods, and servic ...
*
Free trade agreementA free trade agreement (FTA) or treaty A treaty is a formal legally binding written agreement between actors in international law. It is usually entered into by sovereign states and international organizations, but can sometimes include individ ...
*
Free trade area A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreementA free trade agreement (FTA) or treaty A treaty is a formal legally binding written agreement between actors in international l ...
*
Import An import is the receiving country in an export An export in international trade International trade is the exchange of capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distincti ...

Import
*
Infant industry argument The infant industry argument is an economic An economy (from Greek language, Greek οίκος – "household" and νέμoμαι – "manage") is an area of the Production (economics), production, Distribution (economics), distribution and trade ...
*
International trade International trade is the exchange of capital Capital most commonly refers to: * Capital letter Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscul ...
*
List of countries by exports This is a list of countries by exports of goods and services, based on World Bank's data. Merchandise exports This is a list of countries by merchandise exports, based on UN COMTRADE and ITC statistics. The world aggregation represent ...
*
Protectionism Protectionism is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. Proponents argue that protectionist policies sh ...
*
Sales Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the goods or services, completes a sale in ...

Sales
*
Trade barrier Trade barriers are government-induced restrictions on international trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services ...
**
Tariff A tariff is a tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated el ...
**
Non-tariff barriers to trade Non-tariff barriers to trade (NTBs; also called non-tariff measures, NTMs) are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. The Southern African Development C ...


References


External links

*
UK Institute Of Export

World Bank Top exporters
{{Authority control Freight transport International trade