where _αc_ is importing country fixed effect, _αg_ is the HS06 product fixed effect, and _εgc_ is the iid error term. The Bagwell-Staiger theory clearly predicts _β_ 1 _>_ 0 and _β_ 0 _<_ 0, or that the post-WTO binding rate will be positively related to _τgc_<sup>_pre−WTO_</sup> and negatively related to the measure of the importer’s market power (1 _/ωgc_<sup>_∗_).</sup> My estimation exercise serves to complement the original Bagwell-Staiger approach in a number of ways. First, I utilize a slightly different sample of countries (see Table 1 for the list), though notably my additional countries include a number of relatively large (by population) importers - such as Russia, Saudi Arabia, and Ukraine - that acceded to the WTO only after the BagwellStaiger sample period. Second, here I rely heavily on the export supply elasticities provided by Nicita, Olarreaga and Silva (2013) that were not available at the time of the original study. Third, I utilize fixed effects to address other potential determinants of tariffs.<sup>18</sup> Before turning to the estimates, I also explain here the general approach that I take throughout the paper to address potential data limitations.<sup>19</sup> For example, one potential concern is that the elasticities are themselves estimates, and some of the estimated values are extreme.<sup>20</sup> First, I winsorize the data set of the elasticities by setting the extreme values to be the values at the 10th and 90th percentiles of the distribution. Second, in the baseline specifications to each of the regressions, I will take the log of the inverse of foreign export supply elasticity, and I will utilize as a robustness check either an indicator for “high elasticity” products (defined as those above the median of the distribution) or the _level_ of inverse of the foreign export supply elasticity. Third, I will also use as my measure of import tariffs _ln_ (1 + _τ_ ), though I frequently report as a robustness check a measure of the tariff that is simply the level of the tariff, _τ_ .

Table 4 provides evidence of the expected strong negative relationship between the inverse foreign export supply elasticity and the WTO tariff binding commitment taken upon accession for this sample of 12 countries that recently acceded to the WTO. I.e., ceteris paribus, newly acceding members are requested (through WTO negotiations) to take on lower tariff binding commitments in products for which they have higher market power and thus where their tariffs (if left unchecked) would result in larger terms-of-trade externality losses for trading partners. Note that I also find a strong positive relationship between the pre-WTO applied tariff and the WTO tariff binding commitment, in line with the theoretical prediction. In column (2), I show the robustness of the results by replacing the log of the inverse foreign export supply elasticity with an indicator that takes on the value of one if the elasticity is “high” (above the median value) and zero otherwise, and again the estimated size of the coefficient is negative. Specification (3) substitutes the levels of the tariffs and the elasticities for the log levels that are used in the baseline specification and elsewhere in the table. In column (4), I add importing country fixed effects. Columns (5) and (6) split the sample in two depending on whether the importing country was large (by population)

> 18Finally, my estimation exercise here and below relies only on OLS. Unlike the prior literature, I do not implement instrumental variables estimation; thus the estimates reported here should not be interpreted as identifying magnitudes associated with causal effects.

> 19The Appendix provides a full description of the data and its sources.

> 20For a discussion of a variety of potential approaches to adopt to assess the robustness of results, see Broda, Lim ̃ao, and Weinstein (2008) and Nicita, Olarreaga and Silva (2013).

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