Counter-trade is positively correlated with a country’s level of exports. – This means that a higher level of international commercial activity is associated with a high level of counter-trade •
(2) Counter-trade is often used as a substitute for foreign direct investment (FDI). – multinational companies resort to counter-trade as a second-best solution when host countries impose restrictions on inward FDI. • Countries engaged in heavy counter-trade tend to be those that severely restrict inward FDI.