I (Meaning and importance of Exports) Unit Structure

(g) 
Higher Productivity 
An export firm can benefit from the economies of large scale 
operations. Higher productivity is a must in the competitive market. 
Export firms spend a lot on research and development in order to 
absorb the increased production. As the domestic markets have 
limited capacity the exports become unavailable. 
(h) 
Social Responsibility 
Some business houses are committed to exports. They have 
build up their image in domestic as well as in overseas markets. 
They take up export activity to meet social responsibility of 
strengthening foreign exchange reserve of the nation. 
(i) 
Political Stability 
Exporters need to look into the political stability factor before 
selection of overseas markets. Exporters may ignore those 
markets, where there is lot of political instability. Due to political 
instability, there is change of governments or the government may 
find it difficult to adopt stable foreign trade policies. This creates 

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risks and uncertainties for the exporters. Exporters may select 
those markets, where there good degree of political stability. 
(j) 
Reducing Business Risk 
A diversified business helps the export firm in spreading the 
risk in several export markets. When a firm is selling its product in a 
number of markets, a downward trend in a market may be counter 
balanced by a rise in sales in the overseas markets. 
(k) 
Location 
The exporters may consider the location factor in selection of 
overseas markets. Normally distant location markets need to be 
avoided as there are high transportation, and delays in deliveries, 
and other problems. 
5.5 PRODUCT 
PLANNING