The WTO Trade Effect

The WTO Trade Effect

This paper re-examines 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 bias, allows...

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Bibliographic Details
Main Authors: CHANG, Pao Li, LEE, Myoung-Jae
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2011
Subjects:
Trade flow
Treatment effect
Matching
Permutation test
Signedrank test
Sensitivity analysis
International Economics
Online Access:https://ink.library.smu.edu.sg/soe_research/1373
https://ink.library.smu.edu.sg/context/soe_research/article/2372/viewcontent/WTOTradeEffect_2011.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:This paper re-examines 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 bias, allows general forms of heterogeneous membership effects, and addresses potential hidden selection bias. This is in contrast to most conventional parametric studies on this issue. Our results suggest large GATT/WTO trade-promoting effects that are robust to various restricted matching criteria, alternative GATT/WTO indicators, non-random incidence of positive trade flows, inclusion of multilateral resistance terms, and different matching methodologies.

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