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Economic Incentives for Countertrade

Abstract

This paper examines countertrade using standard economic theory. We show that in many circumstances countertrade is a rational response transaction costs, information asymmetry, moral hazard-agency problems, and other market imperfections. This paper also integrates countertrade into international business theories. Some preliminary hypotheses, that may be empirically testable after refinement, are developed.

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*Rolf Mirus is Professor of International Business and Finance at the University of Alberta. He holds a doctorate in economics from the University of Minnesota and his research interests are in the area of international financial markets and managements.

**Bernard Yeung is Assistant Professor of International Business and Finance at the University of Alberta. He holds a Ph.D. in International Business from the University of Chicago, and his major research interest is in applying economic theory to international business phenomena.

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Mirus, R., Yeung, B. Economic Incentives for Countertrade. J Int Bus Stud 17, 27–39 (1986). https://doi.org/10.1057/palgrave.jibs.8490433

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