When and why a country prefer exports?
A country exports prefer when the goods, services and skills are surplus than the demands of that country.we can say, a country has been able to produce more goods and services than can be consumed at home. This prompted a search for foreign opportunities to sell the “excess” production and to sell goods or services to other countries at prices higher than the prices they can obtain domestically.In today’s global economy, exporting serves somewhat different purposes for developing and industrial countries.
Although the economies of developing countries are typically not as productive as the economies of industrial countries, developing countries nonetheless produce some goods and services in amounts they are unable to use or consume at home. This is called a production surplus.
For many developing countries, exports also serve the purpose of earning foreign currency with which they can buy essential imports—foreign products that they are not able to manufacture, mine, or grow at home. Developing countries, in other words, sell exports, in part, so that they can import. Exporting goods and services can also further advance developing nations’ domestic economies.
Exports are also more than just an outlet for “excess” production for industrial countries. Because their economies are more diverse, industrial countries tend to:
- Export a much wider variety of products than do developing countries; and
- Export a larger proportion of their total production of goods and services.
Source: (WTO, 2013)
a) A country’s international financial strength determines on the basis of favorable balance of trade. The positions are happened when export is more than import. Foreign exchange earnings will be in a favorable position of trade. So the wealth of a nation increases while earning of foreign exchange increase.
b) Government supports: Government supports in maximum ways to safeguard the exporters in almost all their problems and threats in the form of funding as well as services.
3. You will maintain quality as per international standard, while meeting the quality requirements of foreign buyer. This will increase your confidence in building up your business world, as delivering best quality pays society always best.
4. To compare to domestic market, quantity of exports will be more in turn the profit.
5. Globalization makes liberalization in terms of procedures and formalities