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

Author

Listed:
  • 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.

Suggested Citation

  • Bichaka Fayissa & Badassa Tadasse & Andrew McColley, 2008. "Does a Unilateral Policy Change Promote Trade? The Case of African Growth and Opportunity Act," Working Papers 200801, Middle Tennessee State University, Department of Economics and Finance.
  • Handle: RePEc:mts:wpaper:200801
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    File URL: http://capone.mtsu.edu/berc/working/AGOA-TradeCreation.pdf
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    References listed on IDEAS

    as
    1. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    AGOA; Trade liberalization; Development Cooperation;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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