The WTO Trade Effect

Pao-Li Chang () and Myoung-jae Lee

No 31-2010, Working Papers from Singapore Management University, School of Economics

Abstract: This paper reexamines the GATT/WTO membership effect on bilateral trade flows, using nonparametric methods including pair-matching, permutation tests, and a Rosenbaum (2002) sensitivity analysis. Together, these methods provide an estimation framework that is robust to misspecification biases, allows general forms of heterogeneous treatment effects, and addresses potential hidden selection biases. This is in contrast to most conventional parametric studies on this issue. Our results suggest large GATT/WTO trade-promoting e®ects, robust to various restricted matching criteria, alternative indicators for GATT/WTO involvement, different matching methodologies, non-random incidence of positive trade flows, and inclusion of multilateral resistance terms.

Keywords: Trade flow; Treatment effect; Matching; Permutation test; Signed-rank test; Sensitivity analysis (search for similar items in EconPapers)
JEL-codes: C14 C21 C23 F13 F14 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2010-12
New Economics Papers: this item is included in nep-cwa and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in SMU Economics and Statistics Working Paper Series

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Related works:
Journal Article: The WTO trade effect (2011)
Working Paper: The WTO Trade Effect (2008)
Working Paper: The WTO Trade Effect (2007)
Working Paper: The WTO Trade Effect (2007)
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