International Journal of Purchasing and Materials Management

Internationalizing Procurement: Determinants of Countertrade Involvement Members Only Content

As protectionist governments around the world have toppled, free trade zones have opened up, and trade barriers have dissolved through either multilateral or free trade agreements, greater numbers of enterprises have looked to foreign markets as sources of supply. At the end of the 1980s, the growth in worldwide sourcing was accompanied by a similar expansion in unconventional trade financing mechanisms, the most prominent of which was countertrade. American companies have historically been reluctant to get involved in countertrade due to its high perceived and real risks. This research examines data from the peak period of countertrade growth to identify likely determinants of business unit countertrade involvement. The impact of global horizontal direct investment on future countertrade activity and the contribution that purchasing can make in developing organizational capabilities to fulfill international trade obligations are discussed.

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