WTO Membership and the Extensive Margin of World Trade: New Evidence

Felbermayr, Gabriel; Köhler, Wilhelm

doi:10.1142/9789814440196_0005

Cited by 4 publications

(2 citation statements)

References 21 publications

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“…Although the coe¢ cient estimate for 2000 (Panel VI) is positive only when the BV constraints are not imposed, the corresponding values of bias and ratio hardly suggest a robust causal e¤ect. 22 Since RTA members and countries using a common currency are on average engaged in higher levels of trade, but only the CU e¤ect is robust to selection on unobservables, Table 4 presents an interesting scenario. Now, the treatment is de…ned as sharing both a currency union and belonging to a RTA.…”

Section: Log Resultsmentioning

confidence: 99%

“…Moreover, Felbermayr and Kohler (2009) consider the issue to be less signi…cant with cross-section data. 2 6 The author reports non-robust standard errors to be more conservative (i.e., the author does not want to …nd the statistically signi…cant e¤ect obtained under exogeneity to disappear quickly due to large standard errors).…”

Section: Bivariate Probit Resultsmentioning

confidence: 99%

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On the robustness of the trade-inducing effects of trade agreements and currency unions

Roy

2013

Empir Econ

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Regional trade agreements (RTAs) and currency unions (CUs) share the characteristic of being potentially endogenous proxies for trade costs in gravity equations. In both cases, this problem is magni…ed by the paucity of reliable instruments. Instead of resorting to the oft-employed alternative of panel data to address selection on just the time-invariant unobservables, this paper assesses the extent to which the positive association between CU or RTA membership and bilateral trade can be considered causal. Despite not identifying point estimates, striking results are obtained when looking at overall trade and extensive margins. Although most cross-sections exhibit a positive association between both RTAs and CUs and overall bilateral trade, the evidence in favor of a causal e¤ect is strong only for CUs. Interestingly, for recent years, there exists strong evidence in support of both RTAs and CUs causing trade at the extensive margin. However, the magnitude of either e¤ect is sensitive to the amount of selection on unobservables.

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Section: Log Resultsmentioning

confidence: 99%

Section: Bivariate Probit Resultsmentioning

confidence: 99%

On the robustness of the trade-inducing effects of trade agreements and currency unions

Roy

2013

Empir Econ

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The Impact of Formal and Informal Institutions on Per Capita Income

Dobler

2009

SSRN Journal

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Despite the many approaches of neoclassical and endogenous growth theory, economists still face problems explaining the reasons for income differences between countries. Institutional economics and the deep determinants of growth literature try to depart from pure economic facts to examine economic development. Therefore, this article analyses the impact of institutions, geography and integration on per capita income. Concerning theoretical reasoning, emphasis is on the emergence of institutions and their effect on economic growth.However, institutions can appear in different shapes since political, legal and economic restrictions are not the only constraints on human behaviour. Norms and values also limit possible actions. Therefore, a differentiation between formal and informal institutions is made. The regression results affirm a crucial role of informal and formal institutions concerning economic development.

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Ethnic Networks, Information, and International Trade: Revisiting the Evidence

Felbermayr¹,

Jung²,

Toubal³

2010

Annals of Economics and Statistics

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Influential empirical work by Rauch and Trindade (REStat, 2002) finds that Chinese ethnic networks of the magnitude observed in Southeast Asia increase bilateral trade by at least 60%. We argue that this estimate is upward biased due to omitted variable bias.Moreover, it is partly related to a preference effect rather than to enforcement and/or the availability of information. Applying a theory-based gravity model to ethnicity data for 1980 and 1990, and focusing on pure network effects, we find that the Chinese network leads to a more modest amount of trade creation of about 15%. Using new data on bilateral stocks of migrants from the World Bank for the year of 2000, we extend the analysis to all potential ethnic networks. We find, i.a., evidence for a Polish, a Turkish, a Mexican, or an Indian network. While confirming the existence of a Chinese network, its trade creating potential is dwarfed by other ethnic networks.

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WTO Membership and the Extensive Margin of World Trade: New Evidence

Cited by 4 publications

References 21 publications

On the robustness of the trade-inducing effects of trade agreements and currency unions

On the robustness of the trade-inducing effects of trade agreements and currency unions

The Impact of Formal and Informal Institutions on Per Capita Income

Ethnic Networks, Information, and International Trade: Revisiting the Evidence

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