Abstract
This paper reviews the range of countertrade activities taking place in international trade and the existing hypotheses that purport to explain their existence. Countertrade may be attractive in the short run in response to some pre-existing market distortion, impediment or disequilibrium. However, unless the countertrade imposed can directly address the distortion then this international transaction mode may prove to be very costly in the long run, if not the short run. This paper concludes that the superiority of countertrade over other transaction modes available in international trade and its efficacy as an economic instrument in circumventing perceived distortions is not clear. Countries that pursue this form of trade policy intervention for industrial development may cause a reduction in national, and perhaps global, welfare.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
