Effect of the accession to the world trade organization on commercial services exports

Abstract

The literature on the trade effects of the membership in the World Trade Organization (WTO) has essentially focused on trade in goods, including goods exports. The present analysis has investigated the effect of the WTO membership on commercial services exports for 25 Article XII Members (i.e., countries that joined the WTO under Article XII of the Marrakesh Agreement establishing the WTO) over the period from 2005 to 2019. Results, based on the two-stage probit least squares estimator have revealed that the WTO membership increased significantly commercial services exports, including both modern and traditional services exports in Article XII members, and promoted services export diversification. Using the two-step system generalized method of moments estimator, the analysis has shown heterogenous effects of the membership in the WTO on commercial services export performance among Article XII Members relatively to Non-Article XII WTO Members.