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An export in international trade is a goods produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an exporter; the foreign buyer is an importer.Joshi, Rakesh Mohan, International Marketing, Oxford University Press, New Delhi and New York. Services that figure in international trade include financial, accounting and other professional services, tourism, education as well as intellectual property rights.
Exportation of goods often requires the involvement of customs authorities.
Exporting is mostly a strategy used by product based companies. Many manufacturing firms begin their global expansion as exporters and only later switch to another mode for serving a foreign market. (2025). 9780078112775, McGraw-Hill Education. ISBN 9780078112775
are laws, , policies, 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.
The third basis for a tariff involves dumping. When a producer exports at a loss, its competitors may term this dumping. Another case is when the exporter prices a good lower in the export market than in its domestic market. 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 the United States steel tariff in 2002, and when China placed a 14% tariff on imported auto parts. Such tariffs may lead to a complaint with the World Trade Organization (WTO) which sets rules and attempts to resolve trade disputes. US/China Trade Tensions , Darren Gersh. Retrieved 21 May 2006. If that is unsatisfactory, the exporting country may choose to put a tariff of its own on imports from the other country.
Exporting may help a company achieve experience curve effects and location economies in their home country. Ownership advantages include the firm's , international experience, and the ability to develop either low-cost or differentiated products. The locational advantages of a particular market are a combination of costs, market potential and financial risk. Internationalization advantages are the benefits of retaining a core competence within the company and threading it though the value chain rather than to license, outsource, or sell it.
In relation to the eclectic 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 as direct investment. Export's lower risk typically reduces the rate 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 manage marketing 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.
High transport costs can make exporting uneconomical, particularly for bulk products.
Another drawback is that trade barriers can make exporting uneconomical and risky.
For small and medium-sized enterprises (SMEs) with fewer than 250 employees, export is generally more difficult than serving the domestic market. The lack of knowledge of , cultural differences, different languages and foreign-exchange situations, as well as the strain of resources and staff, complicate the process. Two-thirds of SME exporters pursue only one foreign market.Daniels, J., Radebaugh, L., Sullivan, D. (2007). International Business: environment and operations, 11th edition. Prentice Hall.
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.
Exports could also devalue a local currency to lower export prices. It could also lead to imposition of tariffs on imported goods.
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