Tying trade flows: A theory of countertrade
AbstractA countertrade contract ties an export to an import. Usually, countertrade is seen as a form of bilateralism and reciprocity and thus as an inefficient form of international exchange. In this paper we argue that there are circumstances where the tying of two technologically unrelated trade flows may be efficiency enhancing. We show that countertrade can be seen as an efficient institution that solves moral hazard problems and restores creditworthiness of countries with large outstanding debt. We test the implications of our model using a sample of 230 countertrade contacts.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 396.
Date of creation: Dec 1993
Date of revision:
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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
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Countertrade; Double moral hazard problem; Sovereign debt; Technology transfer;
Other versions of this item:
- Marin, Dalia & Schnitzer, Monika, 1994. "Tying Trade Flows: A Theory of Countertrade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 946, C.E.P.R. Discussion Papers.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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- Caves, Richard E & Marin, Dalia, 1992.
"Countertrade Transactions: Theory and Evidence,"
Economic Journal, Royal Economic Society,
Royal Economic Society, vol. 102(414), pages 1171-83, September.
- Caves, Richard E. & Marin, Dalia, 1992. "Countertrade Transactions: Theory and Evidence," Munich Reprints in Economics, University of Munich, Department of Economics 3111, University of Munich, Department of Economics.
- Caves, Richard E. & Marin, Dalia, 1992. "Countertrade transactions: theory and evidence," Munich Reprints in Economics, University of Munich, Department of Economics 19952, University of Munich, Department of Economics.
- Caves, R.E. & Marin, D., 1992. "Countertrade Transactions: Theory and Evidence," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1599, Harvard - Institute of Economic Research.
- Barbara Cresti, 2005. "US domestic barter: an empirical investigation," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(17), pages 1953-1966.
- Ellingsen, Tore, 1998. "Payments in Kind," Working Paper Series in Economics and Finance 244, Stockholm School of Economics, revised 10 Feb 2000.
- Amann, Erwin & Marin, Dalia, 1994. "Risk-Sharing in International Trade," Munich Reprints in Economics, University of Munich, Department of Economics 3110, University of Munich, Department of Economics.
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