Abstract
Free trade is beneficial for all nations. Pareto optimality can be reached by trade without barriers, leading to maximizing total welfare of nations involved. Yet there are clear cases of complaining at the World Trade Organization (WTO) in which home bias is plausibly the reason for complaining, rather than objective criteria of the rules of trade agreements. Next to home bias in individual cases induced home bias leading to complaining at WTO might also be a trend. Using correlation and stepwise regression analysis a dataset on 28 complaining countries is analysed. The number of complaints at the WTO is the dependent variable in exploratory modeling. Independent variables are various variables on economic structure. Structural unemployment (SUN), agricultural import share, current account balance, international property rights (IPR), and foreign direct investment (FDI) turned out to be significantly related to the number of complaints. This is a strong indicator that complaining at the WTO is at least partly induced by other than objective factors. One of these factors other than objective factors could be considered as an induced home bias which leads to disruptive trade. The established relationship with one of these factors indicates the existence of induced home bias as an actual trend based on the outcomes of the analysis presented.
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