Joining the WTO: What is the Impact?
by Christopher Balding
ARTICLE | Review of International Economics | Vol.18, 2010
Abstract
Research has called into question the impact of the World Trade Organization (WTO) on trade. This
research, however, has been called into question on both modeling grounds for and failing to utilize
comprehensive fixed effects. Others have found that when these factors are accounted for, imports rise by
significant amounts. This paper seeks to reconcile these findings. I find that the WTO has a larger, though
uneven, impact on exports than imports. The results indicate that the WTO frequently causes imports and
exports to move in opposite directions negating any increase in overall trade. The regressions with and
without fixed country effects generally demonstrate pattern consistency for generalized results that are
robust to change. Owing to the finding that imports rise modestly or even fall without country effects while
exports rise, the results imply that countries may not be as interested in liberalizing trade as selling to the
world.
Research has called into question the impact of the World Trade Organization (WTO) on trade. This research, however, has been called into question on both modeling grounds for and failing to utilize comprehensive fixed effects. Others have found that when these factors are accounted for, imports rise by significant amounts.This paper seeks to reconcile these findings. I find that the WTO has a larger, though uneven, impact on exports than imports.The results indicate that the WTO frequently causes imports and exports to move in opposite directions negating any increase in overall trade. The regressions with and without fixed country effects generally demonstrate pattern consistency for generalized results that are robust to change.Owing to the finding that imports rise modestly or even fall without country effects while exports rise, the results imply that countries may not be as interested in liberalizing trade as selling to the world.Popular Articles
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