Is the WTO Truly Effective?

Abstract

Whether or not the World Trade Organization (WTO) has promoted international trade is under dispute. This article uses a revised traditional gravity model to conduct empirical examination of this problem and found that WTO has recently promoted international trade and that the degree of increase is larger in developed countries than in developing ones. Moreover, regional trade agreements (RTA), currency unions, GDP, and distance are related to the increase of international trade along with the effects of WTO activities. On the other hand, the effect of distance on international trade has been decreasing. Improvements in information technology (IT) may have influenced this finding.