Service Exports and Imports
Service Exports and Imports
Service exports and imports are international earnings other than those derived from goods sent to another country. Receipt of these earnings is considered a service export, whereas payment is considered a service import. Services are also referred to as invisibles. International business comprises many different types of services.
Travel, Tourism, and Transportation
When prints of Return of the Jedi were sent from the United States to be shown in Japan, they traveled internationally as did the Star Wars actors when they went to Australia to publicize the film. Earnings from transportation and foreign travel can be an important source of revenue for international airlines, shipping companies, reservations agencies, and hotels. On a national level, such countries as Greece and Norway depend heavily on revenue collected from carrying foreign cargo on their ships. The Bahamas earns much more from foreign tourists than it earns from exporting merchandise.
Performance of Activities Abroad
Fees are payments for the performance of certain activities abroad—for example, banking, insurance, rentals (e.g., the Star Wars film), engineering, and management services. Engineering services are often handled through turnkey operations, which are the construction under contract of operating facilities that are transferred to the owner when the facilities are ready to begin operations. Fees for management services are often the result of management contracts, arrangements under which one firm provides management personnel to perform general or specialized management functions for another firm.
Use of Assets from Abroad
Royalties are payments for the use of assets from abroad, such as trademarks, patents, copyrights, or other expertise under contracts known as licensing agreements. Royalties are also paid for franchising, a way of doing business in which one party (the franchiser) sells an independent party (the franchisee) the use of a trademark that is an essential asset for the franchisee's business. In addition, the franchiser assists on a continuing basis in the operation of the business, such as by providing components, managerial services, or technology.
Firms often move to foreign licensing or franchising after successfully building exports to a market. This move usually involves a greater international commitment than the early stages of exporting do. The greater involvement occurs primarily because the firm has to send qualified technicians to the foreign country to assist the licensee or franchisee in establishing and adapting its production facilities for the new product.
Service exports and imports are international earnings other than those derived from goods sent to another country. Receipt of these earnings is considered a service export, whereas payment is considered a service import. Services are also referred to as invisibles. International business comprises many different types of services.
Travel, Tourism, and Transportation
When prints of Return of the Jedi were sent from the United States to be shown in Japan, they traveled internationally as did the Star Wars actors when they went to Australia to publicize the film. Earnings from transportation and foreign travel can be an important source of revenue for international airlines, shipping companies, reservations agencies, and hotels. On a national level, such countries as Greece and Norway depend heavily on revenue collected from carrying foreign cargo on their ships. The Bahamas earns much more from foreign tourists than it earns from exporting merchandise.
Performance of Activities Abroad
Fees are payments for the performance of certain activities abroad—for example, banking, insurance, rentals (e.g., the Star Wars film), engineering, and management services. Engineering services are often handled through turnkey operations, which are the construction under contract of operating facilities that are transferred to the owner when the facilities are ready to begin operations. Fees for management services are often the result of management contracts, arrangements under which one firm provides management personnel to perform general or specialized management functions for another firm.
Use of Assets from Abroad
Royalties are payments for the use of assets from abroad, such as trademarks, patents, copyrights, or other expertise under contracts known as licensing agreements. Royalties are also paid for franchising, a way of doing business in which one party (the franchiser) sells an independent party (the franchisee) the use of a trademark that is an essential asset for the franchisee's business. In addition, the franchiser assists on a continuing basis in the operation of the business, such as by providing components, managerial services, or technology.
Firms often move to foreign licensing or franchising after successfully building exports to a market. This move usually involves a greater international commitment than the early stages of exporting do. The greater involvement occurs primarily because the firm has to send qualified technicians to the foreign country to assist the licensee or franchisee in establishing and adapting its production facilities for the new product.
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