Export quota

The export rate ( English export quota is) an economic indicator , which the ratio of exports to GDP an economy reproduces. The opposite is the import quota . In a business context, the share of sales from foreign business in total sales is referred to as the export quota.

General

The export quota provides information about the foreign trade that a state engages in and the extent of this foreign trade, the so-called foreign trade integration. This is expressed in the foreign trade quota , which takes both exports and imports into account. The difference between exports and imports is called the external contribution , the mean value of the export quota and the import quota is called the degree of openness . Almost self-sufficient countries have low export and import quotas. Conversely, small states generally have higher export quotas than large-scale states , because the latter are generally better equipped with production factors. The absolute export volume is not very meaningful, so that the ratio of the export quota has prevailed internationally. While exports are included in the gross domestic product as domestically produced goods, imports do not form part of the gross domestic product.

calculation

All goods and services that were sold abroad within a year are considered exports . Both aggregates result from the trade and services balance . The export proceeds actually received from the sale ( income in domestic currency and foreign exchange income ) only include the goods and services paid for by the importers , not the exports associated with a payment term . The export proceeds are compared to the gross domestic product (GDP), which is a summary of all goods and services produced in the state and thus also includes the exports produced in the country.

${\displaystyle {\text{Exportquote}}={\frac {\text{Exporterlöse}}{\text{Bruttoinlandsprodukt}}}\times 100}$

If exports increase with constant GDP, the export quota increases and vice versa. The export quota changes when the rate of change in export revenue deviates from that of monetary income . The elasticity of supply for exports is higher the easier it is to replace domestic goods with imports in the importing country. There are high supply elasticities where foreign trade is relatively insignificant and has a low export quota.

Economical meaning

Exports and thus the export quota depend on several factors. First of all, a state must have locational advantages and technical knowledge as well as produce goods and services that go beyond the domestic requirements for consumption and investment . What can be sold in the domestic market is not available for export. The part intended for export must, in turn, be superior in terms of market price and quality to the comparable competing goods and services of other countries ( Made in Germany ). In addition, exchange rate relations ( terms of trade ) must ensure a favorable export climate. If these prerequisites are met, then exports can be increased to a situation in which the export-related foreign exchange inflows lead to currency reserves that bring about a factual or formal revaluation of the domestic currency of the exporting country - with a disproportionately low growth in imports .

This appreciation usually leads to a weakening of the exports - invoiced in the domestic currency - and thus the export quota, because the import prices become more expensive for the foreign importers because of the higher foreign exchange rates. Devaluation has the same effect in the importer's country. Also, inflation in the country of the exporter has a price increase in import prices from the importers the consequence. Appreciation / depreciation and inflation are therefore the most important correctives for the export quota.

use

Those who export are also allowed to import and use part of the foreign currency they generate. Because the export proceeds are used to pay the import debts and the debt service ( interest expense and repayment ) for national debts . As a result, export revenues also play a role in the key figure for the interest coverage ratio . The situation is critical for a state if the debt service exceeds 20% to 25% of the permanently achievable export revenues or reaches more than 20% of the state expenditure . The higher the export quota, the more imports and national debt a state can afford and vice versa.

The export quota is a key figure that plays an important role in country ratings by rating agencies and banks . All other things being equal, a rating improves with an increasing export quota and vice versa. This is particularly due to the fact that a high export quota - with a lower import quota - leads to high foreign exchange inflows in favor of the currency reserves of a state, which is regarded as favorable. This situation can also have negative consequences if the growing dependency on exports leads to an economic dependency on the economy in the importing countries. Germany's export quota doubled from 23.1% (1970) to 46.9% (2015), which at the same time increased the export dependency on the foreign economy. In addition, excessive currency reserves mean that the goal of external balance is not achieved .

The fact that small states have relatively high export quotas is statistically proven, because in terms of export quotas in Europe, Luxembourg (213.8%), Malta (141%) and Ireland (121.4%) lead. In contrast, large states such as Spain (33.1%), Italy (30.2%), Greece (30.1%), France (30%) and Great Britain (27.4%) have lower export quotas. Export quotas over 100% can be explained by the fact that the states concerned also have high imports - not included in GDP - which they export after further processing and / or take on a pure trade function and export imported goods at a higher price. A typical example of this is Singapore , as goods are shipped to Singapore and from there reloaded and shipped on without further processing. This is why Singapore has correspondingly high exports and imports; it achieved an export quota of 192.1% (2014).

Criticism of the concept

Export quotas are suitable for comparing the foreign trade activity of different economies, but are very imprecise with regard to the relevance of exports for the respective economy. The numerator (export sales) and the denominator (GDP) are quantities that, strictly speaking, should not be divided by one another. This is because the numerator contains all sales (including intermediate consumption), but the denominator only contains value added (GDP is adjusted for all intermediate consumption). That is why the export quota tends to lead to a strong overestimation of the relevance of exports. In order to illustrate the actual size of exports in relation to the respective national economy, either sales would have to be divided by sales, or value added by value added. The former results in a rate of 27% in the case of Austria, the latter of 29%. In contrast, the conventional export quota in 2011 was 56%.

Business administration

Branches of the economy and companies use the export quota, also foreign business quota, to describe the proportion of foreign sales in total sales. It reflects the export intensity:

${\displaystyle {\text{Exportquote}}={\frac {\text{Auslandsumsatz}}{\text{Umsatzerlöse}}}\times 100}$

Here, too, an increasing foreign turnover with constant total turnover results in a rising export quota and vice versa. While the export quota of small and medium-sized companies was 19.6% of total sales in 2014 , it was 25.6% for large companies . Large companies therefore tend to be more export-intensive. In terms of economic sectors , the automotive industry leads with 18.8% of German export earnings, followed by mechanical engineering (14.2%), chemical industry (9%) and data processing / electrical and optical products (8.1%).

Individual evidence

1. ↑ Manfred Hieber, Foreign Trade, Economic Expansion and Price Level , Volume 34, 1967, p. 39
2. ^ Anton Konrad, Balance of Payments Disturbances and Economic Growth , 1962, p. 29
3. ↑ Reinhold Sellien, Gabler's Wirtschafts-Lexikon , Volume 2, 1977, Sp. 1400
4. ↑ Harold Lydall, Yugoslav Socialism: Theory and Practice , 1984, p. 226
5. ↑ Urs Egger, Agricultural Strategies in Various Economic Systems , 1989, p. 124
6. ↑ Statista.de The statistics portal, European Union: Export quotas in the member states in 2015
7. ↑ Competitions (des) orientierung , 2013, p. 6