Does the GATT/WTO promote trade? After all, Rose was right

Silviano Esteve-Pérez, Salvador Gil-Pareja () and Rafael Llorca-Vivero
Additional contact information
Salvador Gil-Pareja: University of Valencia and Inteco Research Unit
Rafael Llorca-Vivero: University of Valencia and Inteco Research Unit

Review of World Economics (Weltwirtschaftliches Archiv), 2020, vol. 156, issue 2, No 6, 377-405

Abstract: Abstract This paper re-examines the effect of the GATT/WTO on trade using recent econometric developments that allow us estimating structural gravity equations with the Poisson pseudo-maximum likelihood (PPML) estimator on a large dataset that requires computing high-dimensional fixed effects. By doing so, we overcome computational limitations that are present in previous studies. In line with Rose’s (Am Econ Rev 94:98–114, 2004) seminal work, we find that, unlike regional trade agreements and currency unions, the GATT/WTO accession has not generated positive trade effects. This result is robust to the use of alternative measures of trade flows, across periods and country groups, to changes in the periodicity of the data, when taking into account the GATT/WTO accession dynamics, to controlling for the participation of only one country of the dyad in GATT/WTO, to the consideration of non-member participants, and to the use of alternative datasets. Notwithstanding, we also find that PPML results are sensitive to the definition of the dependent variable.

Keywords: GATT/WTO; Trade; Gravity model; PPML; High-dimensional fixed effects (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://link.springer.com/10.1007/s10290-019-00367-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:156:y:2020:i:2:d:10.1007_s10290-019-00367-w

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-019-00367-w

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().