Week four - internationalisation promotion policies

Question 1

what are the main objectives of public promotion policies

Answer 1

• help overcome obstacles to export
• support SMEs and new exporters
• expand the number of exporters
• the existence of similar policies in other countries
• counterbalance other public policies that might discourage exports

Question 2

examples of state public organisations in spain

Answer 2

• Spanish institute for foreign trade
• Spanish company for export credit insurance

Question 3

example of regional public organisations and what they focus on

Answer 3

valencian institute for firm competitiveness
- innovation and R&D
- internationalisation
- other (energy, finance…)

Question 4

types of industry and multi-industry organisations

Answer 4

firm associations
- industry associations
- multi-industry associations
- exporters associations
chambers of commerce
- export promotion chamber plan
- chamber of valencia, castellon, alicante, alcoy…

Question 5

why is obtaining information and advice important as a promotion instrument

Answer 5

it is vital to make the decision on whether to start the process of internationalisation (internal analysis) and to define the internationalisation strategy (external analysis)

Question 6

what is the main information promotion agencies should provide and examples

Answer 6

relevant information on foreign markets:
- publications
- economic reports
- supplies and demands
- stats
assessment on foreign trade:
- procedures and formalities
- tariffs and other barriers
- transport and logistics
- contracts

Question 7

what is the objective of firm-specific promotion programmes

Answer 7

to promote access to foreign markets and to improve its external competitiveness

Question 8

what criteria is public support often subject to

Answer 8

• co-financing
• priority for SMEs
• preference for emerging countries
• justification of aid
• reimbursable expenses

Question 9

what is the form of business cooperation for internationslisation

Answer 9

agreement between two or more independent companies, sharing their skills and resources, establishing (without merging) a degree of commitment in order to increase their competitive advantage

Question 10

what are the advantages of business cooperation

Answer 10

• increased operational dimension/capacity
• exploit synergies
• reduced costs
• expand the supply of exportable products
• compehensive solutions for all firms cooperating

Question 11

most commonly used methods of business cooperation

Answer 11

• export consortium
• groups of international promotion

Question 12

examples of training used for promotion instruments

Answer 12

• countries/sector specific workshops
• seminars
• scholarships

Question 13

types of funding used for promotion instruments

Answer 13

• bilateral funding
• multilateral funding
• exporter and importer finance

Question 14

what type of funding is ‘official export credit and FAD’ and what is it

Answer 14

• bilateral funding
• it is a set of financial arrangements to promote Spanish exports by providing credit with official support

Question 15

what are some characteristics of the official export credit and FAD

Answer 15

• long returning period for loans
• interest rates below those applied in the financial market
• eliminates the risk of interest rate by maintaining a fixed rate throughout the life of a loan
• assuring the political risks through CESCE

Question 16

what is the ‘general agreement on guidelines for export credits officially supported’ and its goal

Answer 16

• it establishes the guidelines for export credit support or state official credit
• its goal is to stop unfair competition between countries in terms of financing terms and interest rates for credits officially supported

Question 17

main guidelines of the ‘general agreement on guidelines for export credits officially supported’

Answer 17

• loans with a repayment period of 2 years or more
• equipment and working plants produced in Spain
• interest subsidised
• military equipment and agricultural products are excluded
• involvement of private banks in this type of financing is secured by the reciprocal interest adjustment convention (CARI)

Question 18

what are FAD credits (development assitance funds)

Answer 18

financial facilities granted to developing countries

Question 19

what is the objective of FAD credits

Answer 19

• support the internationalisation of spanish companies
• promote the development of recipient countries

Question 20

what two funds are the FAD credits split into

Answer 20

• development promotion fund (FONPRODE), managed by the ministry of foreign affairs and cooperation
• fund for the internationalisation of Spanish companies (FIEM), managed by the ministry of industry, tourism and trade

Question 21

what are some promotion instruments of insurance

Answer 21

• insurance policies for exporters
• factoring services
• forfaiting

Question 22

what are some investment abroad (FDI) programmes that aid with internationalisation

Answer 22

• support program for investment projects
• credit line supporting foreign investment
• investment advisory programs
• business accompanying support
• funding for major projects

Question 23

what are some fiscal instruments that aid with internationalisation

Answer 23

• VAT rebate on exports
• export tax incentives (tax credits in corporate taxes)
• tax incentives for investment abroad (tax credits in corporate taxes)
• double taxation agreements