WTO dispute. We describe the matching process in greater detail in the next subsection, but our final sample of data used in the estimation includes 152 respondent/complainant pairs, or roughly 61 percent of the total population of 249 WTO disputes initiated and concluded between 1995 and 2009 that targeted imported products.

In our empirical analysis below, we investigate whether the model explains the trade flow outcomes of certain subsamples of disputes better than others, including differences based on legal resolution of the process, the type of policy being challenged, or the countries involved. Table 1 provides information on the number of disputes in these subsamples. For example, the determinants of trade disputes formally resolved through the WTO’s legal system may be different from determinants of disputes that are settled or withdrawn prior to any formal WTO legal rulings. A WTO Panel Report, or the first formal legal ruling of importance in any dispute, was issued in slightly more than half (78 out of 152) of the disputes in our sample.

Next, we characterize the caseload based on how the respondent’s disputed import policy treated (non-complainant) third country exporters of the disputed product. The first type of dispute involves challenges to policies that the respondent imposed on a “global” basis against all trading partners. Examples include a WTO-inconsistent internal tax, subsidy or domestic regulation that was nevertheless applied on a relatively MFN-conforming basis so as to affect all exporters. The second type of dispute involves challenges to policies that the respondent imposed on a “partial” basis and thus which excluded certain third country exporters. Examples of partial policies would be WTO-inconsistent application of antidumping or countervailing duties or a trade preference scheme.<sup>23</sup> Table 1 indicates that in our final sample of 152 disputes, slightly less than half are associated with challenges to “global” policies, and the rest are associated with “partial” policies.

Finally, we explore whether our model better fits the high-income respondent subsample of data relative to the low-income importing countries. As Table 1 indicates, our sample contains a significant number of disputes involving both high-income and developing countries as both complainants and respondents.<sup>24</sup>

# **4.2 Variable construction and data**

Estimation of equation (12) requires data on trade quantities and prices associated with the products in each dispute. We take this information from a newly constructed database (Bown and Reynolds, 2015) which matches disputes to the c.i.f. value and volume (as measured by the net

> 23To clarify, our categorization as to whether the disputed policy is “global” versus “partial” is based on our judgment of whether its application excluded some, or was applied to all, third country (non-complainant) exporters of the disputed product. I.e., it is not based on whether the allegation focused on (or was limited to) legal arguments or submissions under GATT Article III (National Treatment) versus Article I (MFN Treatment). Such a characterization would not be possible because some of the disputes in our sample do not reach the stage in which complainants must fully articulate their allegations of respondent misconduct. Furthermore, the two allegations are not mutually exclusive. For a discussion of some of the key economic aspects of National Treatment in the GATT and WTO, see Horn (2006). For a discussion of the role of MFN Treatment, see Horn and Mavroidis (2001).

> 24Note, however, that there are no least developed countries in our estimation sample, though this is because least developed countries are mostly absent from involvement in WTO disputes altogether, so this phenomenon is not driven by our particular approach.

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