A Study on the Outcomes by and Constraints of the Change in International Commercial Terms

Abstract

Recently, international commerce is expanding and logistics costs are rising rapidly. In this regard, the Korea International Trade Association recommends changing the international commercial terms under incoterms as a way to reduce logistics costs for import/export companies. This study tried to examine the constraint factors that appear in the process of changing international commercial terms. In order to achieve the research purpose, this study composed questionnaire items by conducting previous studies, expert interviews, and pilot studies. The questionnaire was distributed to random sample companies based on the list of member companies such as the Korea International Trade Association, the Korea Trade-Investment Promotion Agency, and the Korea Small and Medium Business Association. The survey period was from March 2, 2022 to June 30, 2022. About 1,200 copies of the total questionnaire were distributed and 244 copies were used for empirical analysis, and PLS-SEM was performed to derive the results. The results of this study are as follows. First, It was found that the internal rigidity and lack of expertise in determining international commercial terms in trade companies had a negative impact on the change of international commercial terms. Second, It was found that the change of international commercial terms in import/export companies improves trade performance.