Does WTO Matter for the Extensive and the Intensive Margins of Trade?
AbstractWe use 6-digit bilateral trade data to document the effect of WTO/GATT membership on the extensive and intensive product margins of trade. We construct gravity equations for the two product margins where the specifications of these gravity equations are motivated by the model of Eaton and Kortum (2002). The data show that the puzzle of no significant impact of WTO membership on trade documented by Rose (2004) manifests itself differently at the product margins of trade. We show that the impact of the WTO is almost exclusively on the extensive product margin of trade, i.e. trade in goods that were not previously traded. In our preferred specification, WTO membership increases the extensive margin of exports by 31%. At the same time, WTO membership has a negligible or even a negative impact on the intensive margin (the volume of already-traded goods). Incidentally, we also document that standard gravity variables provide good explanatory power for bilateral trade on both margins.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8293.
Date of creation: Mar 2011
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gabriel J. Felbermayr & Wilhelm Kohler, 2006.
"Exploring the Intensive and Extensive Margins of World Trade,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 142(4), pages 642-674, December.
- Gabriel J. Felbermayr & Wilhelm Kohler, 2004. "Exploring the Intensive and Extensive Margins of World Trade," CESifo Working Paper Series 1276, CESifo Group Munich.
- Thomas Chaney, 2008.
"Distorted Gravity: The Intensive and Extensive Margins of International Trade,"
American Economic Review,
American Economic Association, vol. 98(4), pages 1707-21, September.
- Chaney, Thomas, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2006. "Trading Partners and Trading Volumes," DEGIT Conference Papers c011_022, DEGIT, Dynamics, Economic Growth, and International Trade.
- Ghosh, Sucharita & Yamarik, Steven, 2004. "Are regional trading arrangements trade creating?: An application of extreme bounds analysis," Journal of International Economics, Elsevier, vol. 63(2), pages 369-395, July.
- Xuepeng Liu, 2009. "GATT/WTO Promotes Trade Strongly: Sample Selection and Model Specification," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 428-446, 08.
- Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
- Pushan Dutt & Daniel Traca, .
"Corruption and bilateral trade flows: extortion or evasion?,"
ULB Institutional Repository
2013/14172, ULB -- Universite Libre de Bruxelles.
- Pushan Dutt & Daniel Traca, 2010. "Corruption and Bilateral Trade Flows: Extortion or Evasion?," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 843-860, November.
- Aleksandra Parteka & Massimo Tamberi, 2012.
"Relative Product Diversification in the Course of Economic Development: Import-Export Analysis,"
DEGIT Conference Papers
c017_056, DEGIT, Dynamics, Economic Growth, and International Trade.
- Aleksandra PARTEKA & Massimo TAMBERI, 2012. "Relative product diversification in the course of economic development: import-export analysis," Departmental Working Papers 2012-23, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- Aleksandra Parteka & Massimo Tamberi, 2013. "Product Diversification, Relative Specialisation And Economic Development: Import-Export Analysis," GUT FME Working Paper Series A 15, Faculty of Management and Economics, Gdansk University of Technology.
- Dan Ciuriak & Beverly Lapham & Robert Wolfe & Terry Collins-Williams & John M. Curtis, 2011. "New-New Trade Policy," Working Papers 1263, Queen's University, Department of Economics.
- Natalia Kapelko & Natalya Volchkova, 2013. "Export costs of visa restrictions," Working Papers w0195, Center for Economic and Financial Research (CEFIR).
- Dick Nuwamanya Kamuganga, 2012. "What Drives Africa's Export Diversification?," IHEID Working Papers 15-2012, Economics Section, The Graduate Institute of International Studies.
- Scoppola, M. & Raimondi, V. & Olper, A., 2013. "The Impact of EU Trade Preferences on the Extensive and Intensive Agricultural and Food Product Margins," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151145, Agricultural and Applied Economics Association.
- Ana Santacreu, 2012. "The Trade Comovement Puzzle and the Margins of International Trade," 2012 Meeting Papers 34, Society for Economic Dynamics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.