Does WTO Membership Increase the Trade Volume? (Erhýht Die Wto-Mitgliedschaft Das Handelsvolumen?)
Posted: 23 Apr 2008 Last revised: 18 May 2009
Date Written: 04.06.2008
This paper analyses whether membership in the WTO has increased bilateral trade with Germany or not by a standard gravity model. The analyses uses a panel-data set covering the year 1951 until 1999 and almost 6000 country-pairs. Due to methodological effects a Fixed-Effects-Vector-Decomposition-estimator is used. The results suggest that high-income countries profit more from WTO membership than poor countries and therefore the gains from WTO membership is biased towards the rich and industrial countries.
Keywords: WTO, Gravity model, Panel data, fixed effects vector decomposition
JEL Classification: F 13
Suggested Citation: Suggested Citation