The paper
This article reassesses the trade effect of WTO membership using structural gravity and methods that allow accession effects to differ across cohorts. It examines whether countries’ trade was already evolving differently before membership.
Research findings
- Adding international border-by-year controls removes evidence of a pre-trend in the preferred event-study specification.
- Those controls substantially reduce the estimated WTO trade effect, with a larger impact on the estimates than allowing for treatment-effect heterogeneity alone.
Implications for applied research
- Separate membership effects from broader changes in international integration when assessing the WTO’s contribution to trade.
- Use event-study diagnostics and controls for changing border effects when evaluating accession or trade agreements.