Modern Import Promotion: Backgrounds, Objectives and Practices

Christoffer Wickberg

Student thesis: Master thesis

Abstract

Import promotion is deliberate measures to promote imports from certain geographical areas or industries, typically from developing countries. Such measures are implemented by developed countries as a way to increase developing countries trade and growth. This thesis studies contemporary practices of import promotion, creating new knowledge in an area that has undergone great changes during the last decades. Import promotion is studied using an approach inspired by Lederman et al. (2010) and Gripsrud & Benito (2001). Data about objectives, organisational settings, resources and activities of nine modern Import Promotion Agencies is gathered. This data is then used to characterise and analyse import promotion practices. The thesis shows that modern import promotion differs greatly from what has previously been known. Broadly speaking, import promotion initiatives were created to work with the demand side to increase imports from developing countries. But the last decades have brought changes, and import promotion does today instead extensively focus on targeting the supply side. This means that the focus has changed from focusing on the home country importers towards developing country exporters and business support organisations. This thesis also shows that it is possible to talk about two generations of Import Promotion Agencies. The first generation was created in the 1970s and forward, and had narrow focus on marketing activities and targeted only firms, with the objective of specifically increasing the imports from developing countries to the home country. A second generation of Import Promotion Agencies has arisen in the 2000s. This second generation has a broader scope, meaning that more areas than marketing are targeted, often through indirect work via local business support organisations. Here, the goal is often not to increase imports to the home country, but rather to increase overall trade. Finally, this thesis shows that it is possible to underpin research about import promotion with modern theoretical concepts about inefficient markets. Transaction cost economics captures the essentialities of traditional import promotion practices, showing that Import Promotion Agencies have been created as an answer to disproportionally high transaction costs for developing country small and medium sized companies. These transaction costs have decreased as practices in trade has changed, and accordingly has import promotion activities and focus changed. An analysis of modern import promotion should therefore be supplemented with the resource based view, which more directly explains the practices of today.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2016
Number of pages77
SupervisorsAri Kokko