A Managerial Approach to Predicting Countertrade Demands by Developing Countries

Despite econmic reforms in many developing (under the International Monetary Fund's Structural Adjustment Program), countertrade transactions continue to increase. The objective of this study was to validate a model which predicts developing countries' countertrading activities based on their economic characteristics. This model predicts that developing nations which impose countertrade are characterized by declining foreign exchange reserves, commodity terms of trade, balance of trade and increasing debt service ratios.