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We quantify the effects of GATT/WTO membership on trade and welfare. Using an extensive database covering manufacturing trade for 186 countries over the period 1980–2016, we find that the average partial equilibrium impact of GATT/WTO membership on trade among member countries is large, positive, and significant. We contribute to the literature by estimating country-specific estimates and find them to vary widely across the countries in our sample with poorer members benefitting more. Using these estimates, we simulate the general equilibrium effects of GATT/WTO on welfare, which are sizable and heterogeneous across members. We show that countries not experiencing positive trade effects from joining GATT/WTO can still gain in terms of welfare, due to lower import prices and higher export demand.
AbstractSanctions encompass a wide set of policy instruments restricting cross‐border economic activities. In this paper, we study how different types of sanctions affect the export behavior of firms to the targeted countries. We combine Danish register data, including information on firm‐destination‐specific exports, with information on sanctions imposed by Denmark from the Global Sanctions Database. Our data allow us to study firms' export behavior in 62 sanctioned countries, amounting to a total of 453 country‐years with sanctions over the period 2000–2015. Methodologically, we apply a two‐stage estimation strategy to properly account for multilateral resistance terms. We find that, on average, sanctions lead to a significant reduction in firms' destination‐specific exports and a significant increase in firms' probability to exit the destination. Next, we study heterogeneity in the effects of sanctions across (i) sanction types and sanction packages, (ii) the objectives of sanctions, and (iii) countries subject to sanctions. Results confirm that the effects of sanctions on firms' export behavior vary considerably across these three dimensions.
This paper introduces the third update/release of the Global Sanctions Data Base (GSDB-R3). The GSDB-R3 extends the period of coverage from 1950–2019 to 1950–2022, which includes two special periods—COVID-19 and the new sanctions against Russia. This update of the GSDB contains a total of 1325 cases. In response to multiple inquiries and requests, the GSDB-R3 has been amended with a new variable that distinguishes between unilateral and multilateral sanctions. As before, the GSDB comes in two versions, case-specific and dyadic, which are freely available upon request at GSDB@drexel.edu. To highlight one of the new features of the GSDB, we estimate the heterogeneous effects of unilateral and multilateral sanctions on trade. We also obtain estimates of the effects on trade of the 2014 sanctions on Russia.