Import export what does it mean

Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads.

Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. An import is a good or service bought in one country that was produced in another. Imports and exports are the components of international trade.

If the value of a country's imports exceeds the value of its exports, the country has a negative balance of trade , also known as a trade deficit. The United States has run a trade deficit since Census Bureau. Countries are most likely to import goods or services that their domestic industries cannot produce as efficiently or cheaply as the exporting country.

Countries may also import raw materials or commodities that are not available within their borders. For example, many countries import oil because they cannot produce it domestically or cannot produce enough to meet demand. Free trade agreements and tariff schedules often dictate which goods and materials are less expensive to import.

With globalization and the increasing prevalence of free-trade agreements between the United States, other countries and trading blocks, U. Free-trade agreements and a reliance on imports from countries with cheaper labor often seem responsible for a large portion of the decline in manufacturing jobs in the importing nation. Free trade opens the ability to import goods and materials from cheaper production zones and reduces reliance on domestic goods.

To achieve this, the company can establish a new, wholly owned subsidiary i. Some companies purchase their resellers or early partners as VitracEgypt did when it bought out the shares that its partner, Vitrac, owned in the equity joint venture. Other companies may purchase a local supplier for direct control of the supply. This is known as vertical integration. Establishing or purchasing a wholly owned subsidiary requires the highest commitment on the part of the international firm, because the firm must assume all of the risk—financial, currency, economic, and political.

For many major companies, Russia is too big and too rich to ignore as a market. However, Russia also has a reputation for corruption and red tape that even its highest-ranking officials admit. Corruption makes the world less flat precisely because it undermines the viability of legal vehicles, such as licensing, which otherwise lead to a flatter world.

The culture of corruption is even embedded into some Russian company structures. In the s, laws inadvertently encouraged Russian firms to establish legal headquarters in offshore tax havens, like Cyprus.

A tax haven is a country that has very advantageous low corporate income taxes. Businesses registered in these offshore tax havens to avoid certain Russian taxes. This offshore registration, unfortunately, is a danger sign to potential investors like Intel.

Some foreign companies believe that owning their own operations in China is an easier option than having to deal with a Chinese partner. For example, many foreign companies still fear that their Chinese partners will learn too much from them and become competitors. However, in most cases, the Chinese partner knows the local culture—both that of the customers and workers—and is better equipped to deal with Chinese bureaucracy and regulations.

Collaborations offer different kinds of opportunities and challenges than self-handling Chinese operations. For most companies, the local nuances of the Chinese market make some form of collaboration desirable. Even then, these companies tend to hire senior Chinese managers and consultants to facilitate their market entry and then help manage their expansion. Nevertheless, navigating the local Chinese bureaucracy is tough, even for the most-experienced companies.

Embraer is the largest aircraft maker in Brazil and one of the largest in the world. Embraer chose to enter China as its first foreign market, using the joint-venture entry mode. A year later, Harbin Embraer began manufacturing aircraft. In , Embraer announced the opening of its first subsidiary in China. Developing a good relationship with regulators in target countries helps with the long-term entry strategy. Building these relationships may include keeping people in the countries long enough to form good ties, since a deal negotiated with one person may fall apart if that person returns too quickly to headquarters.

One of the most important cultural factors in China is guanxi pronounced guan shi , which is loosely defined as a connection based on reciprocity.

China is a relationship-based society. Relationships extend well beyond the personal side and can drive business as well. With guanxi, a person invests with relationships much like one would invest with capital. Guanxi can potentially be beneficial or harmful. At its best, it can help foster strong, harmonious relationships with corporate and government contacts.

At its worst, it can encourage bribery and corruption. Many companies address this need by entering into the Chinese market in a collaborative arrangement with a local Chinese company. This entry option has also been a useful way to circumvent regulations governing bribery and corruption, but it can raise ethical questions, particularly for American and Western companies that have a different cultural perspective on gift giving and bribery.

In summary, when deciding which mode of entry to choose, companies should ask themselves two key questions:. Once a company has decided to enter the foreign market, it needs to spend some time learning about the local business culture and how to operate within it.

Skip to main content. Search for:. Learn why companies export. Explain the main contractual and investment entry modes. Why Do Companies Export? The company has access to a new market, which has brought added revenues. The cost to manufacture a given unit decreased because Vitrac has been able to manufacture at higher volumes and buy source materials in higher volumes, thus benefitting from volume discounts.

Risks of Exporting. Ethics in Action Different Countries, Different Food and Drug Rules Particular products, especially foods and drugs, are often subject to local laws regarding safety, purity, packaging, labeling, and so on.

Specialized Entry Modes: Contractual Exporting is a easy way to enter an international market. Licensing Licensing is defined as the granting of permission by the licenser to the licensee to use intellectual property rights, such as trademarks, patents, brand names, or technology, under defined conditions.

Franchising Similar to a licensing agreement, under a franchising agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a foreign company for a specified period of time and receives a royalty in return. Specialized Entry Modes: Investment Beyond contractual relationships, firms can also enter a foreign market through one of two investment strategies: a joint venture or a wholly owned subsidiary.

Joint Ventures An equity joint venture is a contractual, strategic partnership between two or more separate business entities to pursue a business opportunity together. Risks of Joint Ventures Equity joint ventures pose both opportunities and challenges for the companies involved. Did You Know: Joint Ventures in China In the past, joint ventures were the only relationship foreign companies could form with Chinese companies.

Wholly Owned Subsidiaries Firms may want to have a direct operating presence in the foreign country, completely under their control. In national accounts exports consist of transactions in goods and services sales, barter, gifts or grants from residents to non-residents: An export of a good occurs when there is a change of ownership from a resident to a non-resident.

Also smuggled goods must be included in exports. Change of ownership does not necessarily imply that the good in question physically crosses the frontier. If goods cross the border due to financial leasing , as deliveries between affiliates of the same enterprise or for significant processing to order or repair national accounts impute a change of ownership even though in legal terms no change of ownership takes place.

Export of services consist of all services rendered by residents to non-residents.