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Risk-Sharing in International Trade: An Analysis of Countertrade

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  • Amann, Erwin
  • Marin, Dalia

Abstract

Countertrade agreements in international trade refer to a trade practice in which an exporter agrees to purchase back commodities proportional to his original export sale in the future. This paper provides a rationale for why such an agreement might be efficient. More specifically, the paper argues that countertrade represents a rational response to market incompleteness by allowing the forward selling of commodities where no organized future market exists. This way countertrade helps to reduce risk by providing information on future market conditions and by offering insurance against random fluctuations in market conditions. Copyright 1994 by Blackwell Publishing Ltd.

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  • Amann, Erwin & Marin, Dalia, 1994. "Risk-Sharing in International Trade: An Analysis of Countertrade," Journal of Industrial Economics, Wiley Blackwell, vol. 42(1), pages 63-77, March.
    • Handle: RePEc:bla:jindec:v:42:y:1994:i:1:p:63-77
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    Cited by:

    1. Dalia Marin & Monika Schnitzer, 2002. "The Economic Institution Of International Barter," Economic Journal, Royal Economic Society, vol. 112(479), pages 293-316, April.
    2. Ellingsen, Tore & Stole, Lars A., 1996. "Mandated countertrade as a strategic commitment," Journal of International Economics, Elsevier, vol. 40(1-2), pages 67-84, February.
    3. Barbara, CRESTI, 2003. "U.S. Domestic Barter : an Empirical Investigation," LIDAM Discussion Papers IRES 2003005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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