IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/2166.html

On the heterogeneous trade and welfare effects of GATT/WTO membership

Author

Listed:
  • Felbermayr, Gabriel
  • Larch, Mario
  • Yalçin, Erdal
  • Yotov, Yoto

Abstract

We build on the latest developments in the structural gravity literature to quantify the partial and general equilibrium effects of GATT/WTO membership on trade and welfare. Using an extensive database covering manufacturing trade for 186 countries over the period 1980-2016, we find that the average impact of GATT/WTO membership on trade among member counties is large, positive, and significant. We contribute to the literature by estimating country-specific estimates and find them to vary widely across the countries in our sample with poorer members benefitting more. Using these estimates, we simulate the general equilibrium effects of GATT/WTO on welfare, which are sizable and heterogeneous across members, and relatively small for non-member countries. We show that countries not experiencing positive trade effects from joining GATT/WTO can still gain in terms of welfare, due to beneficial terms-of-trade effects.

Suggested Citation

  • Felbermayr, Gabriel & Larch, Mario & Yalçin, Erdal & Yotov, Yoto, 2020. "On the heterogeneous trade and welfare effects of GATT/WTO membership," Kiel Working Papers 2166, Kiel Institute for the World Economy.
    • Handle: RePEc:zbw:ifwkwp:2166
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/224063/1/1729200354.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Mario Larch & José‐Antonio Monteiro & Roberta Piermartini & Yoto V. Yotov, 2025. "On the trade effects of GATT/WTO membership: They are positive and large after all," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 58(1), pages 281-328, February.
    2. Campos, Rodolfo G. & Estefania-Flores, Julia & Furceri, Davide & Timini, Jacopo, 2023. "Geopolitical fragmentation and trade," Journal of Comparative Economics, Elsevier, vol. 51(4), pages 1289-1315.
    3. Rodolfo Campos & Mario Larch & Jacopo Timini & Elena Vidal & Yoto Yotov, 2024. "Does the WTO Promote Trade? A Meta-analysis," School of Economics Working Paper Series 2024-11, LeBow College of Business, Drexel University.
    4. Campos, Rodolfo G. & Timini, Jacopo & Vidal, Elena, 2021. "Structural gravity and trade agreements: Does the measurement of domestic trade matter?," Economics Letters, Elsevier, vol. 208(C).
    5. Kim, Dongin & Steinbach, Sandro, 2025. "The Impact of the WTO on Virtual Water Trade and Global Water Redistribution," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361029, Agricultural and Applied Economics Association.
    6. Franco Bedoya,Sebastian, 2022. "Trade Agreements in South Asia : Towards a Successful Story in the Developing World," Policy Research Working Paper Series 10211, The World Bank.
    7. Lin, Qi & Lin, Xi, 2023. "Unveiling the trade and welfare effects of regional services trade agreements: A structural gravity approach," Economic Modelling, Elsevier, vol. 127(C).
    8. Jacopo Timini & Francesca Viani, 2022. "A highway across the Atlantic? Trade and welfare effects of the EU-Mercosur agreement," International Economics, CEPII research center, issue 169, pages 291-308.
    9. Natalie Chen & Dennis Novy, 2022. "Gravity and Heterogeneous Trade Cost Elasticities," The Economic Journal, Royal Economic Society, vol. 132(644), pages 1349-1377.
    10. Yoto V. Yotov, 2021. "The Variation of Gravity within Countries (or 15 Reasons Why Gravity Should Be Estimated with Domestic Trade Flows)," CESifo Working Paper Series 9057, CESifo.
    11. Anderson, Kym, 2022. "Trade-related food policies in a more volatile climate and trade environment," Food Policy, Elsevier, vol. 109(C).
    12. Timini, Jacopo, 2023. "Revisiting the ‘Cobden-Chevalier network’ trade and welfare effects," Explorations in Economic History, Elsevier, vol. 89(C).
    13. Mario Larch & Leandro Navarro, 2022. "Uncertainty in Global Sourcing: Learning, Sequential Offshoring, and Selection Patterns," CESifo Working Paper Series 10043, CESifo.
    14. Jacopo Timini & Nicola Cortinovis & Fernando López Vicente, 2022. "The heterogeneous effects of trade agreements with labour provisions," The World Economy, Wiley Blackwell, vol. 45(9), pages 2820-2853, September.
    15. Rodolfo G. Campos & Jacopo Timini, 2022. "Unequal trade, unequal gains: the heterogeneous impact of MERCOSUR," Applied Economics, Taylor & Francis Journals, vol. 54(49), pages 5655-5669, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    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:ifwkwp:2166. 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.

    We have no bibliographic references for this item. You can help adding them by using 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/iwkiede.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.