The WTO trade effect

Pao Li Chang; Myoung Jae Lee

doi:10.1016/j.jinteco.2011.05.011

The WTO trade effect

Pao Li Chang^*, Myoung Jae Lee

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

75 Citations (Scopus)

Abstract

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.

Original language	English
Pages (from-to)	53-71
Number of pages	19
Journal	Journal of International Economics
Volume	85
Issue number	1
DOIs	https://doi.org/10.1016/j.jinteco.2011.05.011
Publication status	Published - Sept 2011

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title = "The WTO trade effect",

abstract = "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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KW - Permutation test

KW - Sensitivity analysis

KW - Signed-rank test

KW - Trade flow

KW - Treatment effect

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The WTO trade effect

Abstract

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