Political crisis and suspension of duty-free access in Madagascar : assessment of impacts on the garment industry
The export-oriented garment industry in Madagascar has displayed robust growth, thus both contributing to the economy and creating formal employment opportunities. However, it experienced a critical situation after the political turmoil that occurred in 2009. Our investigation using the trade data demonstrates that suspension of duty-free access to the US market (AGOA) resulting from the turmoil had a greater impact on exports, 64%–78% reduction, than the turmoil itself. Our original factory-level data demonstrates that AGOA suspension increased the probability of closure by 57.8% for the factories supplying exclusively to US market, and reduced 6405 jobs for low-skilled positions during the post turmoil period. The factory-level adverse impacts are much less than those on export value at the industry level because of the maintained duty-free access to EU, which has provided an alternative market. It suggests that if EU also had cancelled duty-free access, adverse impacts would have been enormous. Given the general pattern of comparative advantage in low-income countries, unplanned cancellation of duty-free access for them hurts labor-intensive industries and low-skilled workers.
|Date of creation:||01 Jul 2013|
|Publication status:||Published in IDE Discussion Paper = IDE Discussion Paper, No. 422. 2013-07-01|
|Contact details of provider:|| Postal: 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545|
Web page: http://www.ide.go.jp/
More information through EDIRC
|Order Information:|| Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN|
Web: http://www.ide.go.jp/English/Publish/Order Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
- Meyer, Bruce D, 1990.
"Unemployment Insurance and Unemployment Spells,"
Econometric Society, vol. 58(4), pages 757-782, July.
- Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
- Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, July.
- Jeffrey M. Wooldridge, 2001. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232197, July.
- Shiferaw, Admasu, 2007. "Firm Heterogeneity and Market Selection in Sub-Saharan Africa: Does It Spur Industrial Progress?," Economic Development and Cultural Change, University of Chicago Press, vol. 55(2), pages 393-423, January.
- Admasu Shiferaw, 2007. "Firm Heterogeneity and Market Selection in Sub-Saharan Africa: Does It Spur Industrial Progress?," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 393-423.
- Shiferaw, A., 2005. "Firm heterogeneity and market selection in Sub-Saharan Africa : does it spur industrial progress?," ISS Working Papers - General Series 19171, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
- Gladys Lopez-Acevedo & Raymond Robertson, 2012. "Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement," World Bank Publications, The World Bank, number 13137, August. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:jet:dpaper:dpaper422. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Minami Tosa)
If references are entirely missing, you can add them using this form.