Podcast
Questions and Answers
Why are shipments to countries with weak institutions more likely to involve trade credit?
Why are shipments to countries with weak institutions more likely to involve trade credit?
- To bypass legal constraints on financing international sourcing. (correct)
- To ensure post-delivery payment is guaranteed.
- To minimize the risk of cash-in-advance contracts.
- To take advantage of the common law origin of the shipment country.
What sustains cooperation in trading relationships according to the text?
What sustains cooperation in trading relationships according to the text?
- Immediate cash payments for every trade.
- Lack of forward-looking players.
- Known "last period" in the trading agreement.
- Threat to revert to defection tomorrow. (correct)
How can long-term relational contracts help overcome legal constraints in international sourcing?
How can long-term relational contracts help overcome legal constraints in international sourcing?
- By limiting the number of repeated interactions.
- By providing a guarantee for post-delivery payment.
- By ensuring immediate cash payments for every transaction.
- By often being more impactful than contractual governance. (correct)
What is a common strategy employed in shipments to countries with weak institutions?
What is a common strategy employed in shipments to countries with weak institutions?
Why do repeated interactions between parties in trading relationships matter?
Why do repeated interactions between parties in trading relationships matter?
In the context of international sourcing, why is reliance on relational contracts emphasized?
In the context of international sourcing, why is reliance on relational contracts emphasized?
What role do legal institutions play in constraining distributors' ability to finance international sourcing?
What role do legal institutions play in constraining distributors' ability to finance international sourcing?
Why are long-term relational contracts preferred over short-term contractual governance?
Why are long-term relational contracts preferred over short-term contractual governance?
What is a key drawback of relying solely on cash-in-advance contracts for international sourcing?
What is a key drawback of relying solely on cash-in-advance contracts for international sourcing?
How does common law origin of shipment countries correlate with contract enforcement?
How does common law origin of shipment countries correlate with contract enforcement?
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