Goods and services purchased abroad. For example, industrialised countries usually import oil from OPEC countries.
There are basically
five main reasons for which a country may decide to import a certain
good or service:
it simply does not exist in the country: a mineral which is not
in the country's soil, an agriculture product that can't be produced there,
an innovation that has been introduced in other
For financing imports, a country must rely on export, foreign credit (cumulating to foreign debt), foreign direct investments, aid. Countries issuing internationally accepted currency (as USA or EU) may simply pay with it.
Imports are key components of the process of globalization and homogenization of consumption and production.
can be internally divided according to economic destination and
to product classes:
Imports contributes to domestic consumption
(increasing consumers well-being through consumption goods), to domestic
investments (increasing production capabilities
through new - or used! - equipment), to domestic current production
(e.g. raw materials and spare parts). There is an important stream
of imports that first will be processed, then exported
abroad. To a smaller extent, import can satisfy public
expenditure (e.g. military equipment). In short, imports contributes
to all GDP components, but they are usually left by central statistical
offices apart as a stand-alone aggregate.
2. Import can also be divided by product classes at different levels of aggregation (e.g. "agricultural product" instead of "rice"). Import of services comprehends for instance transport and shipping of goods, tourism, banking services, patent royalties.
To identify critical issues in the trade of a country, you need to understand the its degree of concentration, i.e. whether there are only very few countries and commodities representing the bulk of exports and imports. An example of a similar analysis - with data and methodology - is offered here.
are usually seen as determined by:
level and dynamics of domestic income;
In particular, imports
should grow when:
families' disposable income increases (especially if imported goods
are "luxury" goods, i.e. their demand grows more than proportionally
when income rises);
contrasting arguments have been put forth to some of the aforementioned
statements. In particular:
Conversely, the opposite dynamics of imports would be triggered by opposite direction in the determinants.
In micro-economic terms, routines allow firms to explore foreign products to select which one to import, how to position the product in the domestic market, which contracts and clauses to lay down in order to establish payment currency, timing, conditions, etc.
first variable on which imports exert an impact is the trade
balance, i.e. the difference between export and import.
If imports displace
a domestic production, this will involve a fall in that sector's production,
value added, employment. Domestic firms will
also reduce their orders to domestic suppliers, thus also other sectors
will be touched. If imports completely substitute
domestic production in certain areas, entire industries will not start
Imports can exert
a (more or less) powerful influence on price and quality
levels of domestic production, acting as a brake for inflation,
as a challenge for managers and producers at large, as a supply for domestic
Import can be specially taxed with tariffs and duties, thus providing revenue for the State, its activities and expenditure. Protected with prohibitively high tariffs and duties, domestic producers may restrain from adopting new technologies and better organisation models, thus becoming "unfit" to world competition.
Imports have systematically grown faster than GDP in the long-term, so that their share in GDP is much higher now than 30 years ago. The process of integration has been particularly intensive in Western Europe, but it can be seen as a quite general feature.
There is a tendency for countries to buy from poorer countries cheaper goods and from richer countries better goods.
are pro-cyclical and grow faster than GDP. They constitute the
main brake to growth of income.
In a deep recession,
a phenomenon we would call "inversion" takes place: imports
fall, becoming the largest positive contributor to growth of income.
As a consequence, trade balance drastically
improves and may turn out to be decisive for recovery.
To the extent imports depend on exchange rate, the wide and erratic fluctuations of the latter may provoke deviations from general pro-cyclicity of imports. Similarly, since oil represents a major import item for many industrialised countries, its price may exert an important influence on import values, given the low elasticity of oil demand to oil price.
Promoting imports between a couple of countries symultaneously would have very beneficial effects and sustainability, as explained in this paper.
It's possible to engage SME in trade especially by leveraging proximity international trade, nurturing import knowledge and finance.
Protectionist policies would improve temporarily the trade balance and profits of domestic firms, but risk to provoke retaliation and should be substituted by approaches that take a systemic views of interdependences.
exports, trade balances for 181 countries - a time-series - Absolute
values, shares in world market, rankings
export data from 136 countries: a long term time series