Informal trade networks
One of the more interesting traits of barter trade in the transition economies is the participation of foreign owned enterprises. As a rule, barter exchange is assumed to be more costly in terms of transaction costs. Foreign owned enterprises should have access to cash, and they, as opposed to local enterprises, have the ability to choose their location. Still they choose to participate in barter networks. Also, barter is quite common in international trade. Thus, barter deals do not only take place in the absence of money or credits, it also appears to function as a way of gaining access to additional markets or as a way of advertising. Quite a lot of work has been done on the role of informal networks in international trade. Transnational networks have traditionally been considered means of overcoming international trade barriers, whereas domestic networks have been perceived to be trade barriers. This project aims at analysing the value of belonging to informal networks under varying degrees of insecurity, and the costs firms are willing to incur to participate in these networks.
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