low MFN tariffs, TTBs are one of the few WTO-consistent means by which to implement discriminatory trade policy, and accordingly their use has been rising over time [Bown (2011)]. Finally, prior research has found that non-tariff barriers generally, and temporary trade barriers in particular, appear to respond to optimal tariff considerations, which suggests TTBs may offer fertile territory for exploring the effects of DVA in particular.<sup>50</sup> In examining TTB use, our empirical specifications follow our earlier approach for bilateral tariffs. The principal modification is that we use lagged measures of value-added content in our regressions. The reason is that the TTB import coverage ratio (the dependent variable) measures the stock of TTBs in force, not the flow of new TTB imposed/removed (see Section 3.3). Because TTBs typically remain in effect for a number of years, many TTBs in effect at date _t_ were actually imposed in previous periods. Therefore, lagged value-added content better captures the information that was relevant to policymakers at the time when barriers currently in effect were actually adopted.

Table 7 presents ordinary least squares estimates for TTB coverage ratios.<sup>51</sup> Similar to previous tables, columns (1) and (3) include results with importer-year, industry-year, importer-industry, and exporter-industry-year fixed effects, while columns (2) and (4) include importer-industry-year and exporter-industry-year fixed effects. We find that both higher levels of domestic value added in foreign production and foreign value added in domestic production are associated with lower TTB coverage ratios. Further, the coefficient on the inverse import penetration ratio is positive. These results are broadly consistent with our results for<sup>52</sup> applied at the product level, they take on an exporter-specific dimension via country-level exclusions.

> 50Broda, Lim ̃ao and Weinstein (2008) find that US NTBs are higher in sectors with high inverse export supply elasticities. Bown and Crowley (2013) find that United States’ use of antidumping and safeguards is consistent with the Bagwell and Staiger (1990) model of self-enforcing trade agreements and cooperative tariffs. Trefler (1993) also used US NTB data in studying endogenous trade policy, and Goldberg and Maggi (1999) and Gawande and Bandyopadhyay (2000) used US NTB data in their empirical examination of the protection-for-sale model [Grossman and Helpman (1994)].

> 51TTB coverage ratios have a mass point at zero. While we could use limited dependent variable methods to take this into account, we focus on OLS results here for several reasons. First, TTBs are a rare event in the data, occurring in only 6 percent of our importer-exporter-industry-year observations. Standard binary outcome models (e.g., Probit and Logit) are biased in this context [King and Zeng (2001)]. Further, for Tobit models, the distribution of the rare positive outcomes is constrained to follow the extreme upper tail of the normal distribution, which is an untenable assumption in our context. Second, as a practical matter, presuming that zero TTB coverage ratios conform to our basic theoretical predictions, OLS would then understate the true role of value-added content in shaping TTBs (coefficients of interest would be biased toward zero). Thus, OLS is a robust and likely conservative approach to characterizing our data.

> 52One minor point is that we cluster in this table on importer-exporter-industry, in contrast to previous tables. The reason is that TTB policy decisions are independent across industries. This contrasts with tariff policy, where tariffs may be correlated across sectors for institutional reasons – e.g., due to signing bilateral trade agreements that cover multiple sectors, or due to the application of exporter-specific exemptions in the GSP program. The significance levels of our main results in columns (1) and (3) are robust to clustering more conservatively by importer-exporter pair, as we did in previous tables.

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