COURSE:
IMPORT – EXPORT MANAGEMENT
Lecturer: Dr. Nguyễn Hằng Giang Anh
Email: anhnhg@[Link]
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Course Assessment
Content Percentage
Attendance/Homework/Quiz 10%
Group project 20%
Midterm Exam 30%
Final Exam 40%
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Chapter 1
Introduction to
Import - Export
Lecturer: Dr. Nguyen Hang Giang Anh
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Main Content
1. International trade
2. Export-Import
3. The Gravity Model
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1. INTERNATIONAL
TRADE
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International trade vs. Foreign trade
❖ International trade is the exchange of goods and services
across national boundaries. It is the most traditional form
of international business activity and has played a major role
in shaping world history.
❖ International trade
The
The global
global exchange
exchange of goods,
of goods, services, services,
and capital between and capital between
various
variouscountries.
countries.
❖ Foreign trade
The trade
The trade between
between a specificacountry
specific
and itscountry and its external trading
external trading
partners.
partners.
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Importance of International Trade
❖ International trade allows manufacturers and distributors to
seek out products, services, and components produced in
foreign countries because of cost advantages or in order
to learn about advanced technical methods used abroad.
❖ Trade also enables firms to acquire resources that are not
available at home. Besides providing consumers with a
variety of goods and services, international trade
increases incomes and employment
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Major Developments in Trade
❖ Establishment of the World Trade Organization (WTO) as a
permanent trade organization.
❖ Introduction of rules under the WTO to govern trade in services,
trade-related intellectual property, and investment measures.
❖ Increasing in the establishment of regional trading arrangements
such as NAFTA, MERCOSUR, etc.
❖ Growing role of developing countries in world trade.
❖ Increasing participation of small and medium-sized businesses in
export trade.
❖ Dynamic role of services in today’s economy and continued growth
in trade in services.
❖ Globalization, competitive pressures and the
reorganization/relocation of value-added activities.
❖ Fast economic growth in many countries and pressure on limited
resources.
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Typical process flow in international trade
→ This emphasizes the role of customs, logistics, insurance,
and financial institutions in facilitating international trade.
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Leading export countries worldwide in 2023
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Source: [Link]
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Top 20 countries with the largest GDP
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Source: [Link]
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The correlation between trade and GDP growth is that:: the increased, development in trade activity can
leads to higher economic growth.
=> contribute to decrease the unemployment rate
=>. allow the opportunity to have technology transfer to each nation
greater trade openness can significantly raise income levels. However, external factors like recessions or
trade wars can cause negative aspect for economic. (covid19)
What is the correlation between trade
and GDP growth?
What is trade-to-GDP ratio?
The trade-to-GDP ratio is an economic indicator that measures the importance of international trade in
a country's economy. It is calculated as the sum of exports and imports of goods and services, divided
by the country’s gross domestic product (GDP), usually expressed as a percentage.
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International trade in Vietnam
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Source: [Link]
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2. EXPORT - IMPORT
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Defining Export and Import (1/2)
Why exporting has less marketing function?
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Defining Export and Import (2/2)
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Classifying Export and Import (1/3)
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Classifying Export and Import (2/3)
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Classifying Export and Import (3/3)
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Strategic Advantages of Exports
• Avoids substantial costs of establishing
manufacturing operations in the host country
• Increase revenues and profitability
• Achieve economies of scale in production and
research
• Alleviate excess capacity in domestic operations
• Minimize risk (as compared to licensing and
foreign direct investment)
• Diversify markets
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Strategic Advantages of Imports
• Decrease costs and increase competitiveness and
profitability in order to compete in a global market
• Secure higher quality products, supplies,
materials, and/or components
• Minimize risk and investment
• Diversify suppliers to reduce operating risk
• Local unavailability due to geographic, political or
developmental reasons
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3. THE GRAVITY MODEL
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Gravity Model for Bilateral Trade (1/3)
→ Geography (Distance) and Economy Size (GDP) are
the most important determinants of bilateral trade flows.
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Gravity Model for Bilateral Trade (2/3)
→ US trades more heavily with the three largest European
economies. 25
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Gravity Model for Bilateral Trade (3/3)
A: a constent term (estimated) (other factor)
Tij the value of trade between country i and country j
Yi the GDP of country i, Yj is the GDP of country j
Dij the distance between country i and country j
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Example
Calculate the bilateral trade between Vietnam and other
countries, assume A = 0.05
Economy size Distance to Bilateral trade
(1000 USD) Vietnam
VIETNAM
223,779,865
US 19,485,394,000 6,218
Japan 4,872,415,104 3865
Korea 1,530,750,923 3,111
Australia 1,323,421,072 5,173
China 12,237,700,479 2,458
India 2,650,725,335 3,190
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6 hw nha
Which country has the highest bilateral
trade with Vietnam? lam dua theo bai tap tren)
What are other factors affecting bilateral
trade? (A)
