Export Paper Research BASM530. Components Demand in destination market Competitive advantage of...

Export Paper Research

BASM530

Components

• Demand in destination market

• Competitive advantage of exporting country/firm

• Trade costs

• Marketing issues

Demand in destination market

• Economic growth: Countries that are growing rapidly will buy more of everything.– Economic development: As countries get richer (higher

income per capita) they will consume relatively more luxury goods

• Sector growth: Has consumption of goods in the relevant product sector been growing? Has the sector that uses this product as an input been growing?

Demand in destination market

• Potential demand: You might be able to benchmark against another country. If consumption of a goods per capita is low relative to an international standard (cars, fast food, wine, etc.), then demand may be expected to grow.

• Import growth • Complementary goods: Some goods require

complementary goods (e.g., cars need roads). Be sure that the complementary goods are in place.

Competitive advantage

• Factor abundance: Are factors abundant that are used intensively in production of the good?

• Industry/firm growth• Export performance: Have exports of the product

been growing?– Is the country a net exporter of the good?

– Revealed comparative advantage

Trade costs

• Tariffs

• Shipping costs

• Exchange rates: Volatile? Trending?

Marketing issues

• Product: Will the product need to be adapted? Will the firm focus on particular varieties?

• Promotion: Are there trade fairs/exhibitions?

• Distribution: Will you market through a local retailer/distributor?

Sources of information

• Lots of links under “Country Research” and “More info” on course webpage

• What follows are some particular useful ones

Demand• Business Source Complete: search by using

keywords “datamonitor”, industry name, and country name

• International market research reports from Industry Canada

• Market Reports from Canada’s Department of Foreign Affairs and International Trade (DFAIT)

• Global Market Information Database: Very detailed product information

• Earthtrends: Useful but a bit out-of-date• World Development Indicators: Detailed country

information

Trade/tariff data

• Canada/US: Use Strategis

• Other countries: Use Commodity trade

• Lots of links to tariff schedules

• Freight costs: may be able to get quotes from shipping companies

Exchange rates

• World Development Indicators has historical information for almost 200 countries

• My colleague Werner Antweiler maintains a website with current (as well as some historical data).

Have fun and good luck!