The Impact of African Growth and Opportunity Act on Sub-Saharan Africa Countries’ Export to the United States of America
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Date
2011-06
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Addis Ababa University
Abstract
The African growth and opportunistic act (AGOA) is a US initiative which provides preferential access to Africa’s product in US market since its enactment in 2000. This thesis seeks to assess the impact of AGOA on SSA countries total export to US. For this purpose, a dynamic panel data gravity model with endogenous explanatory variable is used and the generalized method of moment estimators is employed. The estimation is conducted for a panel of 33 AGOA eligible SSA countries over a period of nine years (from 2001 to 2009).
The result shows a positive and significant effect of AGOA on overall export of SSA countries to US, but the coefficient is not different from zero. Therefore, the Act is essential for SSA long-term economic growth and poverty reduction. This study recommends the elimination of demand side constraints as well as targeting on the agricultural sector and extending the Act beyond 2015.
Keywords: AGOA, Dynamic Panel Data, Export of SSA, Gravity model, GMM estimators, preferential access, and Sub-Saharan Africa and United States
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Keywords
AGOA, Dynamic Panel Data, Export of SSA, Gravity model, GMM estimators, preferential access, and Sub-Saharan Africa and United States