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The Impacts of GATT/WTO on Firm-level Trade Structure: 1991-2017

Author

Listed:
  • Chang, Pao-Li

    (Singapore Management University)

  • Chen, Renjing

    (Wuhan University)

  • Jin, Wei

    (Nankai University)

Abstract

In this paper, we develop an estimation procedure to identify the partial (direct) effects of the GATT/WTO membership on the variable and the fixed trade cost, respectively. This extends the techniques of Anderson and Van Wincoop (2003) on the structural relationship of multilateral resistance terms and of Helpman, Melitz and Rubinstein (2008) on the structural modelling of trade incidence. We then develop a general equilibrium framework (that allows the presence of zero trade) to simulate the impact of variable, fixed, and total trade cost changes on the firm-level trade structure (including bilateral export productivity cutoff, weighted/unweighted extensive margin of export, intensive margin, and the mass of active firms) and the aggregate welfare, due to the GATT/WTO system (given the trade cost effects estimated from the first stage), for the period 1991–2017.

Suggested Citation

  • Chang, Pao-Li & Chen, Renjing & Jin, Wei, 2022. "The Impacts of GATT/WTO on Firm-level Trade Structure: 1991-2017," Economics and Statistics Working Papers 5-2022, Singapore Management University, School of Economics.
    • Handle: RePEc:ris:smuesw:2022_005
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    More about this item

    Keywords

    Firm Entry/Exit; Truncated Pareto; Identi cation of Fixed and Variable Trade Costs; Simulation of Counterfactual Changes in Active/Inactive Trading Relationship; Quantitative Welfare Analysis;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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