A THEORETICAL INSIGHT INTO THE CONCEPT OF FOREIGN TRADE OPERATION

• Main Author: O. Kotysh
• Format: Article
• Language: English
• Published: LLC "CPC "Business Perspectives" 2014-06-01
• Series: Економіка розвитку
• Subjects: foreign economic operation; foreign trade; exports; imports; foreign market; phased scheme of entering the foreign market; foreign economic operations algorithm
• Online Access: http://www.ed.ksue.edu.ua/ER/knt/ee142_70/e142kot.pdf

Under modern conditions of development of the national economy a major factor of growth is the effective implementation of foreign economic activity (FEA), which plays a significant role in bоth improving the standard of living of the citizens of Ukraine and strengthening its position in the global market. Ensuring the effectiveness of the FEA implementation is only possible provided a phased development of a rational scheme of a foreign trade operations (FTO). Various researchers resolve questions of a theoretical nature, namely, justifying the appropriateness of FEA, its types and forms, but the problem of the definition of "a foreign transaction" and approaches to the formation of a coherent scheme of its implementation are in the field of scientific research. Given the above, the aim of this paper is to clarify the economic category of a foreign trade operation and develop a phased implementation scheme of foreign trade operations which is currently of practical importance. According to the goal, this study dealt with the following objectives: 1) theoretical approaches to the definition of a foreign trade operation were analysed; 2) the current approaches to the development of a coherent scheme of a foreign trade operation were examined; 3) an FEA implementation scheme was improved with regard to the advantages and shortcomings of the current approaches. Based on the identified strengths and weaknesses of the theoretical approaches an author's vision of the concept of a foreign economic operation was suggested which is a purposeful process between Ukraine's FEA entities and a foreign contractor for the establishment, modification and termination of legal, economic, social, and other relationships between them both in Ukraine and abroad, which causes changes in the assets and liabilities structure, shareholders' equity of a company. The author of this paper developed a phased FEA implementation scheme which considers the main factor that determines the sequence of foreign trade operations, that is, whether a company first enters a particular foreign market, or the operation is repeated. Based on the proposed phased scheme a foreign trade operation algorithm was developed for the first entrance to the external market. Thus, our study made it possible to clarify the concept of a foreign trade operation that is of practical significance for FEA economic operators of Ukraine. On the basis of this approach to understanding such an economic category, a phased FEA implementation scheme and an algorithm of its implementation were developed, which helped specify its stages, functions and identify those responsible for their implementation, which will optimize and increase the effectiveness of foreign economic activity of an enterprise.