The WTO Trade Effect

Pao-Li Chang () and Myoung-jae Lee

No 06-2007, Working Papers from Singapore Management University, School of Economics

Abstract: Rose (2004) showed that the WTO or its predecessor, the GATT, did not promote trade, based on conventional econometric analysis of gravity-type equations of trade. We argue that conclusions regarding the GATT/WTO trade effect based on gravity-type equations are arbitrary and subject to parametric misspecifications. We propose using nonparametric matching methods to estimate the `treatment effect' of GATT/WTO membership, and permutation-based inferential procedures for assessing statistical significance of the estimated effects. A sensitivity analysis following Rosenbaum (2002) is then used to evaluate the sensitivity of our estimation results to potential selection biases. Contrary to Rose (2004), we find the effect of GATT/WTO membership economically and statistically significant, and far greater than that of the Generalized System of Preferences (GSP).

Keywords: GATT/WTO; GSP; 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: 40 pages
Date: 2007-09
New Economics Papers: this item is included in nep-sea
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Published in SMU Economics and Statistics Working Paper Series

Downloads: (external link)
https://mercury.smu.edu.sg/rsrchpubupload/10796/WTOeffect.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Server closed connection without sending any data back

Related works:
Journal Article: The WTO trade effect (2011)
Working Paper: The WTO Trade Effect (2010)
Working Paper: The WTO Trade Effect (2008)
Working Paper: The WTO Trade Effect (2007)
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:siu:wpaper:06-2007

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Singapore Management University, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by QL THor ().