|Felbermayr, Gabriel; Kohler, Wilhelm K. (2007): Does WTO membership make a difference at the extensive margin of world trade? CESifo Working Paper, 1898|
In his seminal paper, Rose (2004) concluded from a gravity-type study of bilateral trade that the GATT/WTO does not play a strong role in encouraging trade. Rose looks at countries where the amount of trade was positive to start with (intensive margin). In this paper, we present a corner-solutions version of the gravity model of bilateral trade which explains zero trade and leaves room for WTO membership to promote trade at the extensive margin of trade. Relying on a Tobit estimation approach, we find that WTO membership has promoted world trade to a larger extent than Rose s results seem to indicate.
|Item Type:||Paper (Discussion Paper)|
Economics > Chairs > CESifo-Professorship for International Trade
|Subjects:||300 Social sciences > 330 Economics|
|JEL Classification:||F12, F13|
|Deposited On:||15. Apr 2014 09:00|
|Last Modified:||29. Apr 2016 09:17|