EFFECTS OF COUNTERTRADE‐DIVERGENT PERCEPTIONS BETWEEN PRACTITIONERS AND NON‐PARTICIPANTS^[1]

Abstract

This article provides a theoretical discussion of countertrade benefits and problems. It then comments on data collected in a 1985 study of large British firms which demonstrate that actual countertraders have perceptions of the effects of this practice which differ markedly from the perceptions of companies that do not countertrade. Throughout, the findings on benefits and problems are compared as between international and domestic countertraders and noncountertraders. It is concluded that many more UK firms could benefit from participation in countertrade.

Motives for and the management of countertrade in domestic markets

“…However, comparative data on both inter-and intra-national CT have been generated by Neale and Shipley (1988) in the UK and by Neale, Shipley and Dodds (1991) in Canada. These studies did not specifically attempt to examine why companies participate in CT. Rather, they sought perceptions concerning the advantages and problems of CT.…”

A Survey of Countertrade Practices with Eastern Europe

“…According to survey respondents, Shipley and Neale noted that countertrade created substantial gains, such as strengthened competitiveness, expanded export volumes, increased capacity utilization and market penetration, but it also brought about considerable costs, especially from disposal of goods, negotiations and increased uncertainty. Neale and Shipley (1988) discussed the advantages and disadvantages of countertrade. Survey findings demonstrated that "actual countertraders have perceptions of the effects of this practice which differ markedly from the perceptions of companies that do not countertrade" (Neale and Shipley, 1988, p. 57).…”

Strategic orientations towards countertrade opportunities in emerging markets

“…They are not elaborated here. It is widely accepted that countertrade is an important means by which to create differential advantage (Asiwaju and Paliwoda, 1986;Cho, 1987;Reisman et al, 1989;Shipley and Neale, 1988) and to penetrate otherwise inaccessible markets (Baranson, 1987;Khoury, 1984;Kryzanowski, 1986;Neale and Shipley, 1988;Weigand, 1980). Moreover, seldom in modern times has the incentive to engage in countertrade been as strong as it is presently, and seldom have the opportunities been so abundant.…”

“…The opportunity for less risky and more profitable countertrade has also grown with the advent in recent years of a global countertrade service industry (Palia, 1990). This has provided specialist bankers, brokers, buyers and lawyers to lessen countertrade risk formerly arising most markedly in insufficient company expertise and difficulties in disposing of goods accepted as payment in countertrade transactions (Neale and Shipley, 1988;Weigand, 1979;Yoffie, 1984).…”