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Does a Unilateral Policy Change Promote Trade? The Case of African Growth and Opportunity Act

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  • Bichaka Fayissa
  • Badassa Tadasse
  • Andrew McColley

Abstract

In recent years, development co-operations that seek to promote trade flows between countries have continued to emerge from the notion that trade has a positive impact on economic growth. We evaluate the impact of one such initiative, the African Growth and Opportunity Act (AGOA), on the eligible Sub-Saharan African (SSA) countries’ exports to the U.S. We find that the implementation of the AGOA has contributed to the initiation of new and the intensification of existing SSA countries’ exports to the U.S. across several sectors. Our results imply that the contribution of such development and cooperation efforts to enhance the long-term economic growth of the parties involved through increased trade flows depends on the ability of policy makers in building upon the trade-initiation impetus generated by the policy change.

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Bibliographic Info

Paper provided by Middle Tennessee State University, Department of Economics and Finance in its series Working Papers with number 200801.

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Date of creation: Jan 2008
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Handle: RePEc:mts:wpaper:200801

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Web page: http://www.mtsu.edu/~berc/working/Economics_Working_Papers.html
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Keywords: AGOA; Trade liberalization; Development Cooperation;

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  1. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  2. David M. Gould, 1998. "Has NAFTA changed North American trade?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q 1, pages 12-23.
  3. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
  4. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
  5. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(2), pages 284-314, June.
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