Does the WTO Increase Trade and Cause Convergence?
International Trade Journal, 29(4), 291-308, 2015
Posted: 23 Oct 2015
Date Written: May 1, 2015
China and India implemented the World Trade Organization (WTO) agreements, removing restrictions with the intent to increase international trade and foreign investment. This article aims to examine whether this objective was achieved by analyzing trends in exports and imports, and determining Granger Causality among FDI, exports, and imports during the pre- and post-WTO periods. Our results show that India’s imports have more than doubled throughout the post-WTO period, indicating substantial WTO effectiveness in India, while the WTO’s effect in China is mixed and not that significant. Further, four theoretical propositions have been posited to encourage further research.
Keywords: International trade, shipment of goods, exports, FDI, imports, trend analysis, WTO, Granger Causality
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