## The WTO Trade Effect (2009)

Citations: | 3 - 0 self |

### BibTeX

@MISC{Chang09thewto,

author = {Pao-li Chang and Myoung-jae Lee},

title = {The WTO Trade Effect},

year = {2009}

}

### OpenURL

### Abstract

This paper proposes to reexamine the GATT/WTO membership effect on bilateral trade flows, using nonparametric methods including pair-matching, permutation tests, and a Rosenbaum (2002) sensitivity analysis. Taken together in a coherent manner, these methods provide an estimation framework that is robust to misspecification biases, allows general forms of heterogeneous treatment effects, and addresses potential hidden selection biases. This is in contrast to most conventional parametric studies of this issue based on gravity models. The results here suggest large GATT/WTO trade-promoting effects, robust to various restricted matching criteria, alternative indicators for GATT/WTO involvement, and different matching methodologies.

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Citation Context ...ee (2005), and applications in Heckman et al. (1998), Lechner (2000), Lee et al. (2007), and Lu et al. (2001). Recently, matching methods have also appeared in the study of the currency union effect (=-=Persson, 2001-=-) and the free trade agreement effect (Baier and Bergstrand, 2009b). For more discussions on treatment effect and matching in general, see Rosenbaum (2002) and Lee (2005). 2.2 Permutation Test for Mat... |

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Citation Context ...ications. This may help explain some of the disagreements in the gravity literature regarding the currency union effect (Persson, 2001; Rose, 2001), or the free trade agreement effect (Frankel, 1997; =-=Baier and Bergstrand, 2007-=-). As the gsp dummy is also allowed to interact with the other covariates, the mean effect estimates of the both-in and one-in membership remain significantly positive. The GSP mean effect estimate is... |

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Citation Context ...ade resistance covariates are very sensitive to the model specifications. This may help explain some of the disagreements in the gravity literature regarding the currency union effect (Persson, 2001; =-=Rose, 2001-=-), or the free trade agreement effect (Frankel, 1997; Baier and Bergstrand, 2007). As the gsp dummy is also allowed to interact with the other covariates, the mean effect estimates of the both-in and ... |

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Citation Context ...same as those based on the Rose (2004) data set. Tomz et al. (2007) also corrected some coding errors in Rose’s data set, in particular, the income status and geography indicator of some territories (=-=Tomz et al., 2007-=-, Foonote 32). This explains the difference in the number of matched pairs obtained for the GSP effect estimation in the ‘within-devel.’ matching given the alternative data sets. Table 6 indicates tha... |

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(Show Context)
Citation Context ..., Lechner (2000), Lee et al. (2007), and Lu et al. (2001). Recently, matching methods have also appeared in the study of the currency union effect (Persson, 2001) and the free trade agreement effect (=-=Baier and Bergstrand, 2009b-=-). For more discussions on treatment effect and matching in general, see Rosenbaum (2002) and Lee (2005). 2.2 Permutation Test for Matched Pairs Although matching estimators are popular in practice, t... |

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