The WTO Trade Effect

Pao-Li Chang (plchang@smu.edu.sg) and Myoung-jae Lee

DEGIT Conference Papers from DEGIT, Dynamics, Economic Growth, and International Trade

Abstract: This paper proposes to reexamine the trade effect of GATT/WTO based on non-parametric econometric techniques. Our estimation framework uses the simplest gravity model that explains bilateral trade volumes with country sizes and trade resistance, without imposing parametric assumptions typically made in gravity-type econometric models. Specifically, matching estimators coupled with permutation tests and signed-rank tests are employed to obtain point and interval estimates. While observable covariates (country sizes and determinants of trade resistance) are controlled for nonparametrically, unobservable selection bias is dealt with by a sensitivity analysis. The results suggest large GATT/WTO effects on trade in both cross-sectional and time-series dimensions, and the results hold regardless of the GATT/WTO indicators (defined by formal membership or de facto participation).

Keywords: GATT/WTO; 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: 2008-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: The WTO trade effect (2011)
Working Paper: The WTO Trade Effect (2010)
Working Paper: The WTO Trade Effect (2007)
Working Paper: The WTO Trade Effect (2007)
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