The gravity model, African Growth and Opportunity Act (AGOA) and US trade relations with sub-Saharan Africa

Dal Didia, Mihai Nica and Geungu Yu

The Journal of International Trade & Economic Development, 2015, vol. 24, issue 8, 1130-1151

Abstract: The United States of America enacted the African Growth and Opportunity Act (AGOA) in 2000 to grant sub-Saharan African countries (SSA) a preferential treatment in their exports to the USA. With this Act, most of the exports from SSA can now enter the USA duty-free, and this is expected to boost the exporting and manufacturing sectors in SSA. Hopefully, this singular act of assistance from the USA will spur entrepreneurship in SSA, thereby creating jobs and jump starting meaningful economic growth in the region. Since trade is a major catalyst in economic development, AGOA is arguably the most meaningful intervention from a developed country to an under-developed region such as SSA in recent times. Has AGOA had any impact on US trade with SSA? This paper sheds some light on this issue by examining the flow and composition of trade between the USA and AGOA countries. The analysis uses trade data (US imports) for 36 countries over 12 years. Empirical estimations based on the gravity model show that receiving AGOA status has a strong positive and significant impact on overall trade with the US. Interestingly, however, the analysis also shows a disproportionate impact of crude oil imports from the oil-producing countries of Angola, Gabon, and Nigeria, which is clearly not the intent of the Act.

Date: 2015
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2014.1000942 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:24:y:2015:i:8:p:1130-1151

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2014.1000942

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().