Literature review Assignment Example | Topics and Well Written Essays - 1250 words - 1

Literature review - Assignment showcaseA payment contract is a structured negotiation between a supplier and a company. In this case, the company pile pay the supplier a penalty or take the products from a supplier. The company and supplier agree on a payment method for all products. Additionally, the company must(prenominal) pay the supplier for products not taken. This is based on an agreed ceiling. Organizational managers privation to recognize the methods they can use to finance international trade in order to conduct importing and exporting with an prey of maximizing the value of their organization.Pol Antras and Fritz Foley (2011) wrote an article in which they explored international trade finance practices. Their study examine some of the most important financial terms that support international trade (Antras & Foley, 2011, p. 7). The study provided opportunities for consciousness how the financial terms affect trade. Antras and Foley (2011) used detailed transaction le vel information and data from a U.S based firm that exported refrigerated and frozen food products. The researchers began by outlining broad patterns on the use of incompatible financing terms. The patterns helped in identifying a model for a trade finance mode, which is shaped by the risk that importers may default on exporters. Additionally, the model is based on the probability that exporters may fail to confront goods according to the contract. According to the researchers, the empirical results of the study show that transactions may occur on earn of credit terms, and cash in advance in case the importer operates in a country that has irresolute contractual enforcement. Exporters r arly use letters of credit. The need for prepayment diminishes as importers and exporters establish a relationship.Managers of multinational corporations need to decide the best financing terms for their transactions. Exporters may need importers to pay for ordered goods before the goods are loa ded for shipment, or they may allow