Barter is often perceived as something that preceded money and is no longer relevant. But bartering still occurs, even among large enterprises in developed countries, which commonly exchange goods and services such as advertising and travel. This paper offers a review of posited motives for interorganizational barter; it further investigates which motives are relevant predominantly for developing (and possibly transition) economies and which motives also appear in developed countries. Barter in developing countries may be motivated by limited access to hard currency, as well as to decrease cash holdings, which minimizes the threat of extortion by organized crime syndicates and increases the probability that tax authorities accept non-cash payments. Furthermore, bartering may be used to decrease tax burdens, repatriate capital, deal with undervalued or overvalued domestic currency, circumvent the effects of inflation, or disguise dumping, in both developing and developed economies. Better reasons would include cash retention, a decreased need for bank loans, creation of goodwill, access to new markets, reductions of excess inventory, or increased production.
Advances in Economics, Risk Management, Political and Law Science: Proceedings of the 1st Wseas International Conference on Economics, Political and Law Science (epls '12), Proceedings of the 1st Wseas International Conference on Risk Management, Assessment and Mitigation (rima '12), 2012, p. 125-129
Barter; Developing Economies; Transition Economies; Developed Economies
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1st International Conference on Economics, Political and Law Science (EPLS ’12), 2012