Anexport ininternational trade is agood produced in one country that is sold into another country or aservice provided in one country for a national or resident of another country. The seller of such goods or the service provider is anexporter; the foreign buyers is animporter.[1] Services that figure in international trade include financial, accounting and other professional services, tourism, education as well asintellectual property rights.
Exportation of goods often requires the involvement ofcustoms authorities.
Exporting is mostly a strategy used by product based companies. Manymanufacturing firms begin their global expansion as exporters and only later switch to another mode for serving a foreign market.[2]
There are four main types of export barriers: motivational, informational, operational/resource-based, and knowledge.[3][4]
Trade barriers are laws,regulations,policy, 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.[5]
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 andarchaeological artifacts. For example:
Nuclear Suppliers Group limits trade in nuclear weapons and associated goods (45 countries participate).
TheAustralia Group limits trade in chemical and biological weapons and associated goods (39 countries).
TheWassenaar Arrangement limits trade in conventional arms and technological developments (40 countries).
Although the outbreak ofCOVID-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.[6]
Tariffs, a tax on a specific good or category of goods exported from or imported to a country, is an economic barrier to trade.[7] 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 tosubsidies; tariffs reduce the industry's incentives to produce goods quicker, cheaper, and more efficiently, becoming ever less competitive.
The third basis for a tariff involvesdumping. When a producer exports at a loss, its competitors may term thisdumping. Another case is when the exporter prices a good lower in the export market than in its domestic market.[8] 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 theUnited States steel tariff in 2002, and when China placed a 14% tariff on imported auto parts. Such tariffs may lead to a complaint with theWorld Trade Organization (WTO) which sets rules and attempts to resolve trade disputes.[9] If that is unsatisfactory, the exporting country may choose to put a tariff of its own on imports from the other country.
Vessel at Altenwerder Container Terminal (Hamburg)
In relation to theeclectic 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 asdirect investment. Export's lower risk typically reduces therate of return 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 managemarketing 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.[11]
Exporting may not be viable unless appropriate locations can be found abroad.[2]
High transport costs can make exporting uneconomical, particularly for bulk products.[2]
Another drawback is that trade barriers can make exporting uneconomical and risky.[2]
Forsmall and medium-sized enterprises (SMEs) with fewer than 250 employees, export is generally more difficult than serving the domestic market. The lack of knowledge oftrade regulations, cultural differences, different languages andforeign-exchange situations, as well as the strain of resources and staff, complicate the process. Two-thirds of SME exporters pursue only one foreign market.[12]
Another disadvantage is the dependency on almost unpredictable exchange rates. The depreciation of foreign currency badly affects exporters. For example, Armenia exports different things - from foodstuff to software. In 2022, the country had an enormous number of Russian visitors and tourists because of the military situation in Russia. This resulted in a change in exchange rates and the appreciation of the Armenian dram. At first, it may seem that Armenia’s economy is growing. In fact, the GDP growth is expected to hit 7% by the IMF. However, exporters, who export products and get paid mostly in dollars, suffer because of the depreciation of the dollar against the Armenian dram. Moreover, Armenia’s other exporting bright spot is the IT industry, since a lot of companies and individuals work for US-based companies and get paid in US dollars. Because of the drastic change in the exchange rates, these people and companies who export their service to the US or other countries and get paid in US dollars, make around 25% less revenue.[13]
Exports could also devalue a local currency to lower export prices. It could also lead to imposition of tariffs on imported goods.[11]
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).[3][4]
^Joshi, Rakesh Mohan, International Marketing, Oxford University Press, New Delhi and New York.ISBN0-19-567123-6
^abcdWashington, Charles W. L. Hill, University of (2015).International business : competing in the global. Most developing economies now focus on exportation.marketplace (Tenth ed.). McGraw-Hill Education. p. 454.ISBN978-0-07-811277-5.{{cite book}}: CS1 maint: multiple names: authors list (link)
^abSeringhaus, F. R (1990).Government export promotion: A global perspective. Routledge. p. 1.ISBN0415000645.
