Revisiting the Trade Impact of the African Growth and Opportunity Act : A Synthetic Control Approach
This study examines the impact of the African Growth and Opportunity Act using the synthetic control method, a quasi-experimental approach. The novelty in the approach is that it addresses problems of estimation that are prevalent in nonexperimenta...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/673071566330630943/Revisiting-the-Trade-Impact-of-the-African-Growth-and-Opportunity-Act-A-Synthetic-Control-Approach http://hdl.handle.net/10986/32318 |
| Summary: | This study examines the impact of the
African Growth and Opportunity Act using the synthetic
control method, a quasi-experimental approach. The novelty
in the approach is that it addresses problems of estimation
that are prevalent in nonexperimental methods used to
analyze the impact of preferential trade agreements. The
findings show that most of the eligible countries registered
gains in exports due to the African Growth and Opportunity
Act. However, the results are varied, and the gains were
largely unsteady. Much of the gains are due to exports of
petroleum and other minerals, while there are few countries
that were able to expand into manufacturing and other
industrial goods. The positive trade impacts were largely
associated with improvements in information and
communications technology infrastructure, integrity in the
institutions of legal and property rights, ease of labor
market regulations, and sound macroeconomic environment,
including stable exchange rates and low inflation. Undue
exposure to a single market, like the United States, or few
commodities may have also restricted the gains from trade. |
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