IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/262167.html
   My bibliography  Save this paper

Effect of the Duration of the Membership in GATT/WTO on Commercial Services Exports in Developing Countries

Author

Listed:
  • Gnangnon, Sèna Kimm

Abstract

The present article has investigated the effect of developing countries' duration of membership in the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) on their commercial services exports. It has relied on a set of 128 countries over the period from 2008 to 2019, and utilized the two-step system generalized method of moments estimator. It has revealed that the duration of membership in the GATT/WTO was associated with higher commercial services exports, including both modern and traditional services exports. However, Article XII Members (states that were not Members of GATT, but joined the WTO after its inception) have experienced higher commercial services exports (including traditional services exports) than Non-Article XII Members (i.e., states that were GATT Members before the creation of the WTO). For low-income member states, the membership duration has resulted in an increase in traditional services exports at the expense of modern services exports. Conversely, relatively wealthier member states have increased modern services exports at the expense of traditional services exports, as their membership duration rose. The analysis has also established that member states that have improved their capacities to use, adopt and adapt frontier technologies have enjoyed higher commercial services exports, including modern services exports, but have not experienced an increase in traditional services exports. Finally, the duration of membership in the GATT/WTO has led to higher commercial services exports, including both modern and traditional services exports for member states that have improved their penetration in the international markets for goods. The policy implications of the analysis are discussed.

Suggested Citation

  • Gnangnon, Sèna Kimm, 2022. "Effect of the Duration of the Membership in GATT/WTO on Commercial Services Exports in Developing Countries," EconStor Preprints 262167, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:262167
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/262167/1/GATT-WTO%20Membership%20Duration-Services%20Exports.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series wp-2017-31, World Institute for Development Economic Research (UNU-WIDER).
    2. Shin, Wonkyu & Ahn, Dukgeun, 2019. "Trade Gains from Legal Rulings in the WTO Dispute Settlement System," World Trade Review, Cambridge University Press, vol. 18(1), pages 1-31, January.
    3. Alonso-Borrego, Cesar & Arellano, Manuel, 1999. "Symmetrically Normalized Instrumental-Variable Estimation Using Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 36-49, January.
    4. Barry Eichengreen & Poonam Gupta, 2013. "Exports of services: Indian experience in perspective," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 6(1), pages 35-60, April.
    5. Philipp Lamprecht & Sébastien Miroudot, 2020. "The value of market access and national treatment commitments in services trade agreements," The World Economy, Wiley Blackwell, vol. 43(11), pages 2880-2904, November.
    6. Dreher, Axel & Voigt, Stefan, 2011. "Does membership in international organizations increase governments' credibility? Testing the effects of delegating powers," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 326-348, September.
    7. Brotto, André & Jakubik, Adam & Piermartini, Roberta, 2021. "WTO accession and growth: Tang and Wei Redux," WTO Staff Working Papers ERSD-2021-1, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. Osnago,Alberto & Piermartini,Roberta & Rocha Gaffurri,Nadia Patrizia, 2018. "The Heterogeneous Effects of Trade Policy Uncertainty : How Much Do Trade Commitments Boost Trade ?," Policy Research Working Paper Series 8567, The World Bank.
    9. Nuno Limão & Giovanni Maggi, 2018. "Uncertainty and Trade Agreements," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 3, pages 47-88, World Scientific Publishing Co. Pte. Ltd..
    10. Fernando Leibovici, 2021. "Financial Development and International Trade," Journal of Political Economy, University of Chicago Press, vol. 129(12), pages 3405-3446.
    11. Fernandes, Ana M. & Mattoo, Aaditya & Nguyen, Huy & Schiffbauer, Marc, 2019. "The internet and Chinese exports in the pre-ali baba era," Journal of Development Economics, Elsevier, vol. 138(C), pages 57-76.
    12. Gnangnon, Sèna Kimm, 2022. "Effect of Aid for Trade flows on the Accession to the World Trade Organization," EconStor Preprints 261331, ZBW - Leibniz Information Centre for Economics.
    13. Dutt, Pushan & Mihov, Ilian & Van Zandt, Timothy, 2013. "The effect of WTO on the extensive and the intensive margins of trade," Journal of International Economics, Elsevier, vol. 91(2), pages 204-219.
    14. Alan V. Deardorff, 2001. "International Provision of Trade Services, Trade, and Fragmentation," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 233-248, May.
    15. Susan Ariel Aaronson & M. Rodwan Abouharb, 2011. "Does the WTO Help Member States Clean Up?," Working Papers 2011-13, The George Washington University, Institute for International Economic Policy.
    16. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    17. Bernard Hoekman, 2017. "Trade in services: Opening markets to create opportunities," WIDER Working Paper Series 031, World Institute for Development Economic Research (UNU-WIDER).
    18. Eichengreen, Barry & Gupta, Poonam, 2012. "The Real Exchange Rate and Export Growth: Are Services Different?," Working Papers 12/112, National Institute of Public Finance and Policy.
    19. Sudip Ranjan Basu, 2008. "Does WTO accession affect domestic economic policies and institutions?," IHEID Working Papers 03-2008, Economics Section, The Graduate Institute of International Studies, revised Feb 2008.
    20. Sam Laird, 1999. "The WTO’s Trade Policy Review Mechanism – From Through the Looking Glass," The World Economy, Wiley Blackwell, vol. 22(6), pages 741-764, August.
    21. Sèna Kimm Gnangnon, 2021. "Manufacturing Exports and Services Export Diversification," The International Trade Journal, Taylor & Francis Journals, vol. 35(3), pages 221-242, May.
    22. Thomas Chaney, 2016. "Liquidity Constrained Exporters," SciencePo Working papers hal-03389283, HAL.
    23. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    24. Tang, Man-Keung & Wei, Shang-Jin, 2009. "The value of making commitments externally: Evidence from WTO accessions," Journal of International Economics, Elsevier, vol. 78(2), pages 216-229, July.
    25. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May.
    26. Pravakar Sahoo & Ranjan Kumar Dash, 2017. "What Drives India's Surge in Service Exports?," The World Economy, Wiley Blackwell, vol. 40(2), pages 439-461, February.
    27. Bernard Hoekman & Ben Shepherd, 2017. "Services Productivity, Trade Policy and Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 40(3), pages 499-516, March.
    28. Bernard Hoekman & Aaditya Mattoo & André Sapir, 2007. "The political economy of services trade liberalization: a case for international regulatory cooperation?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(3), pages 367-391, Autumn.
    29. Nuno Limão & Patricia Tovar, 2018. "Policy choice: Theory and evidence from commitment via international trade agreements," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 6, pages 179-198, World Scientific Publishing Co. Pte. Ltd..
    30. Zsolt Darvas, 2012. "Real Effective Exchange Rates for 178 Countries: a New Database," Working Papers 1201, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
    31. Sèna Kimm Gnangnon & Shishir Priyadarshi, 2016. "Export Product Diversification, Services Production and Exports in Least Developed Countries," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-36, October.
    32. Mr. Nikola Spatafora & Rahul Anand & Mr. Saurabh Mishra, 2012. "Structural Transformation and the sophistication of Production," IMF Working Papers 2012/059, International Monetary Fund.
    33. Hausmann, Ricardo & Hidalgo, Cesar, 2014. "The Atlas of Economic Complexity: Mapping Paths to Prosperity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262525429, December.
    34. Aaronson, Susan Ariel & Abouharb, M. Rodwan, 2014. "Does the WTO help member states improve governance?," World Trade Review, Cambridge University Press, vol. 13(3), pages 547-582, July.
    35. Christopher Balding, 2010. "Joining the World Trade Organization: What is the Impact?," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 193-206, February.
    36. Viktor Stojkoski & Zoran Utkovski & Ljupco Kocarev, 2016. "The Impact of Services on Economic Complexity: Service Sophistication as Route for Economic Growth," PLOS ONE, Public Library of Science, vol. 11(8), pages 1-29, August.
    37. Liu, Xuepeng & Mattoo, Aaditya & Wang, Zhi & Wei, Shang-Jin, 2020. "Services development and comparative advantage in manufacturing," Journal of Development Economics, Elsevier, vol. 144(C).
    38. Chaney, Thomas, 2016. "Liquidity constrained exporters," Journal of Economic Dynamics and Control, Elsevier, vol. 72(C), pages 141-154.
    39. Zsolt Darvas, 2012. "Compositional effects on productivity, labour cost and export adjustments," Policy Contributions 730, Bruegel.
    40. Ghosh, Arunabha, 2010. "Developing countries in the WTO Trade Policy Review Mechanism," World Trade Review, Cambridge University Press, vol. 9(3), pages 419-455, July.
    41. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    42. Mishra, Saurabh & Tewari, Ishani & Toosi, Siavash, 2020. "Economic complexity and the globalization of services," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 267-280.
    43. Arti Grover Goswami & Aaditya Mattoo & Sebastián Sáez, 2012. "Exporting Services : A Developing Country Perspective," World Bank Publications - Books, The World Bank Group, number 2379, December.
    44. Giovanni Maggi & Andres Rodriguez-Clare, 1998. "The Value of Trade Agreements in the Presence of Political Pressures," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 574-601, June.
    45. Clarke, George R.G., 2008. "Has the internet increased exports for firms from low and middle-income countries," Information Economics and Policy, Elsevier, vol. 20(1), pages 16-37, March.
    46. Thomas Chaney, 2016. "Liquidity Constrained Exporters," Post-Print hal-03389283, HAL.
    47. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    48. Sun, Meng, 2021. "The Internet and SME Participation in Exports," Information Economics and Policy, Elsevier, vol. 57(C).
    49. Mario Larch & José-Antonio Monteiro & Roberta Piermartini & Yoto V. Yotov, 2019. "On the Effects of GATT/WTO Membership on Trade: They Are Positive and Large after All," CESifo Working Paper Series 7721, CESifo.
    50. Nyahoho Emmanuel, 2010. "Determinants of Comparative Advantage in the International Trade of Services: An Empirical Study of the Hecksher-Ohlin Approach," Global Economy Journal, De Gruyter, vol. 10(1), pages 1-24, February.
    51. Marc Auboin & Martina Engemann, 2014. "Testing the trade credit and trade link: evidence from data on export credit insurance," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(4), pages 715-743, November.
    52. Zdenek Drabek & Marc Bacchetta, 2004. "Tracing the Effects of WTO Accession on Policy‐making in Sovereign States: Preliminary Lessons from the Recent Experience of Transition Countries," The World Economy, Wiley Blackwell, vol. 27(7), pages 1083-1125, July.
    53. repec:hal:spmain:info:hdl:2441/5g3sadr9h8gbri8hrtq0h6au2 is not listed on IDEAS
    54. Fukunari Kimura & Hyun-Hoon Lee, 2006. "The Gravity Equation in International Trade in Services," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 92-121, April.
    55. Mansfield, Edward D. & Reinhardt, Eric, 2008. "International Institutions and the Volatility of International Trade," International Organization, Cambridge University Press, vol. 62(4), pages 621-652, October.
    56. Ciuriak, Dan & Dadkhah, Ali & Lysenko, Dmitry, 2020. "The Effect of Binding Commitments on Services Trade," World Trade Review, Cambridge University Press, vol. 19(3), pages 365-378, July.
    57. Moshirian, Fariborz & Li, Donghui & Sim, Ah-Boon, 2005. "Intra-industry trade in financial services," Journal of International Money and Finance, Elsevier, vol. 24(7), pages 1090-1107, November.
    58. Chowdhury, Abdur & Liu, Xuepeng & Wang, Miao & Wong, M. C. S., 2021. "The Role of Multilateralism of the WTO in International Trade Stability," World Trade Review, Cambridge University Press, vol. 20(5), pages 668-689, December.
    59. Caroline Freund & Diana Weinhold, 2002. "The Internet and International Trade in Services," American Economic Review, American Economic Association, vol. 92(2), pages 236-240, May.
    60. Janet Ceglowski, 2006. "Does Gravity Matter in a Service Economy?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(2), pages 307-329, July.
    61. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    62. Roy, Martin, 2019. "Elevating services: Services trade policy, WTO commitments, and their role in economic development and trade integration," WTO Staff Working Papers ERSD-2019-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    63. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gnangnon, Sèna Kimm, 2023. "Effect of the duration of membership in the GATT/WTO on economic growth volatility," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 448-467.
    2. Gnangnon, Sèna Kimm, 2022. "Effect of the Duration of Membership in the GATT/WTO on Human Development in Developed and Developing Countries," EconStor Preprints 265061, ZBW - Leibniz Information Centre for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gnangnon, Sèna Kimm, 2022. "Effect of the Duration of Membership in the GATT/WTO on Human Development in Developed and Developing Countries," EconStor Preprints 265061, ZBW - Leibniz Information Centre for Economics.
    2. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    3. Gnangnon, Sèna Kimm, 2022. "Duration of WTO Membership and Investment-Oriented Remittances Flows," EconStor Preprints 251274, ZBW - Leibniz Information Centre for Economics.
    4. Gnangnon, Sèna Kimm, 2023. "Effect of the duration of membership in the GATT/WTO on economic growth volatility," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 448-467.
    5. Gnangnon, Sèna Kimm, 2020. "Aid for Trade and Services Export Diversification in Recipient-Countries," EconStor Preprints 210467, ZBW - Leibniz Information Centre for Economics.
    6. Sèna Kimm Gnangnon, 2023. "Effect of the duration of membership in the GATT/WTO on human development in developed and developing countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(4), pages 943-983, November.
    7. Sèna K. Gnangnon, 2021. "Aid for Trade and services export diversification in recipient countries," Australian Economic Papers, Wiley Blackwell, vol. 60(2), pages 189-225, June.
    8. Gnangnon, Sèna Kimm, 2020. "Effect of Poverty on Services Export Concentration in Developing Countries," EconStor Preprints 223178, ZBW - Leibniz Information Centre for Economics.
    9. Gnangnon, Sèna Kimm, 2021. "WTO membership, the membership duration and the utilization of non-reciprocal trade preferences offered by the QUAD Countries," EconStor Preprints 247265, ZBW - Leibniz Information Centre for Economics.
    10. Gnangnon, Sèna Kimm, 2022. "Duration of the Membership in the World Trade Organization and Aid for Trade Flows," EconStor Preprints 260562, ZBW - Leibniz Information Centre for Economics.
    11. Gnangnon, Sèna Kimm, 2022. "Effect of the duration of membership in the World Trade Organization on Trademark Applications," EconStor Preprints 253266, ZBW - Leibniz Information Centre for Economics.
    12. Sèna Kimm Gnangnon, 2021. "Development aid and services export diversification," International Journal of Economic Policy Studies, Springer, vol. 15(1), pages 125-156, February.
    13. Gnangnon, Sèna Kimm, 2022. "Effect of Aid for Trade flows on the Accession to the World Trade Organization," EconStor Preprints 261331, ZBW - Leibniz Information Centre for Economics.
    14. Gnangnon, Sèna Kimm, 2022. "The Least Developed Countries' Services Waiver and the Stability of Least Developed Countries' Services Exports," EconStor Preprints 260587, ZBW - Leibniz Information Centre for Economics.
    15. Gnangnon, Sèna Kimm, 2021. "Effect of Multilateral Trade Liberalization on Services Export Diversification," EconStor Preprints 229152, ZBW - Leibniz Information Centre for Economics.
    16. Sèna Kimm Gnangnon, 2022. "Export diversification and financial openness," International Economics and Economic Policy, Springer, vol. 19(4), pages 675-717, October.
    17. Gnangnon, Sèna Kimm & Iyer, Harish, 2018. "Does bridging the Internet Access Divide contribute to enhancing countries' integration into the global trade in services markets?," Telecommunications Policy, Elsevier, vol. 42(1), pages 61-77.
    18. Bunje, Madinatou Yeh & Abendin, Simon & Wang, Yin, 2022. "The multidimensional effect of financial development on trade in Africa: The role of the digital economy," Telecommunications Policy, Elsevier, vol. 46(10).
    19. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    20. Gnangnon, Sèna Kimm, 2022. "Effect of the utilization of non-reciprocal trade preferences offered by the QUAD countries on beneficiary countries' economic complexity," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).

    More about this item

    Keywords

    Duration of membership in the GATT/WTO; Commercial services exports; Frontier technology readiness; Penetration in goods markets;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:esprep:262167. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.