A Multinational Analysis of Firms Using International Countertrade

Abstract

ABSTRACT International countertrade continues to be a major form of direct, business-to-business marketing strategy in the increasingly global world markets. A recent study (Dertouzos, Lester, and Solow 1989) concluded that part of the erosion of USA-based firms' competitive position is due to insufficient emphasis on international markets. The popular press has also long argued that, compared to firms from other countries, USA-based firms are more ignorant of international countertrade or more reluctant to use it as part of their strategic arsenal. This preliminary study assesses the accuracy of these arguments using data from a sample of 108 firms from 23 countries that engage in business-to-business international countertrade transactions. The data support the supposition that USA-based firms are indeed different in terms of their approach to international countertrade. They use countertrade less frequently, derive a lower proportion of total annual sales from countertrade, and are more aggressive in setting countertrade prices than are firms from other countries. USA-based firms also tend to use the more reactive forms of countertrade. However, USA-based firms do not differ in terms of the level of satisfaction reported for direct business-to-business international countertrade activities.