The Wto Trade Effect

Rose (2004) showed that the GATT/WTO membership does not enhance trade between countries, once other conditioning factors are taken into account. Rose's study is subject to three potential shortcomings. First, the approach is parametric and thus is prone to biases due to misspecifications. Seco...

Full description

Saved in:
Bibliographic Details
Main Author: CHANG, Pao-Li
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2007
Subjects:
Online Access:https://ink.library.smu.edu.sg/soe_research/1087
http://www.econ.hit-u.ac.jp/~trade/apts/2007/2007Papers/Pao-Li%20Chang.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
id sg-smu-ink.soe_research-2086
record_format dspace
spelling sg-smu-ink.soe_research-20862010-09-23T05:48:03Z The Wto Trade Effect CHANG, Pao-Li Rose (2004) showed that the GATT/WTO membership does not enhance trade between countries, once other conditioning factors are taken into account. Rose's study is subject to three potential shortcomings. First, the approach is parametric and thus is prone to biases due to misspecifications. Second, the countries are likely to be spatially correlated, and this problem gets aggravated by taking `country-couples' as the observation units. Third, added to this spatial dependence is the usual temporal dependence over time in the country panel data. This paper proposes nonparametric methods to estimate the treatment effect of the GATT/WTO membership, which circumvent the complicated spatial and temporal dependence in the data. In particular, we adopt matching methods to obtain point estimates of treatment effect, and permutation test and signed-rank test to assess the statistical significance of the treatment effects. We examine the effect of the GATT/WTO membership, in comparison with the effect of the Generalized System of Preferences (GSP), on bilateral trade flows. Various matching criteria are experimented: matching without restriction, matching restricted to observations of the same country-couple, matching restricted to observations of the same year, matching restricted to observations of the same GATT/WTO period, and matching restricted to observations of the same income class. Contrary to Rose (2004), the finding is an overwhelming positive effect of GATT/WTO membership, not less than that of the GSP. 2007-11-07T08:00:00Z text https://ink.library.smu.edu.sg/soe_research/1087 http://www.econ.hit-u.ac.jp/~trade/apts/2007/2007Papers/Pao-Li%20Chang.pdf Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University International Economics
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic International Economics
spellingShingle International Economics
CHANG, Pao-Li
The Wto Trade Effect
description Rose (2004) showed that the GATT/WTO membership does not enhance trade between countries, once other conditioning factors are taken into account. Rose's study is subject to three potential shortcomings. First, the approach is parametric and thus is prone to biases due to misspecifications. Second, the countries are likely to be spatially correlated, and this problem gets aggravated by taking `country-couples' as the observation units. Third, added to this spatial dependence is the usual temporal dependence over time in the country panel data. This paper proposes nonparametric methods to estimate the treatment effect of the GATT/WTO membership, which circumvent the complicated spatial and temporal dependence in the data. In particular, we adopt matching methods to obtain point estimates of treatment effect, and permutation test and signed-rank test to assess the statistical significance of the treatment effects. We examine the effect of the GATT/WTO membership, in comparison with the effect of the Generalized System of Preferences (GSP), on bilateral trade flows. Various matching criteria are experimented: matching without restriction, matching restricted to observations of the same country-couple, matching restricted to observations of the same year, matching restricted to observations of the same GATT/WTO period, and matching restricted to observations of the same income class. Contrary to Rose (2004), the finding is an overwhelming positive effect of GATT/WTO membership, not less than that of the GSP.
format text
author CHANG, Pao-Li
author_facet CHANG, Pao-Li
author_sort CHANG, Pao-Li
title The Wto Trade Effect
title_short The Wto Trade Effect
title_full The Wto Trade Effect
title_fullStr The Wto Trade Effect
title_full_unstemmed The Wto Trade Effect
title_sort wto trade effect
publisher Institutional Knowledge at Singapore Management University
publishDate 2007
url https://ink.library.smu.edu.sg/soe_research/1087
http://www.econ.hit-u.ac.jp/~trade/apts/2007/2007Papers/Pao-Li%20Chang.pdf
_version_ 1770569403187855360