The Impact of the African Growth and Opportunity Act on Sub-Sahara African Value-Added Agricultural Exports

Abstract

This thesis uses new measures of value added trade for agricultural exports which originate from Sub-Sahara African (SSA) countries and go to the United States of America (U.S.A.). First, the impact of the African Growth and Opportunities Act (AGOA) on SSA’s domestic value-added exports is assessed by using a sectoral structural gravity model. The study then evaluates the AGOA’s effect on the extensive margin and intensive margin of US-SSA value added trade using a Helpman, Melitz, and Rubinstein (2008) (HMR) two-step procedure model. The empirical results show that AGOA has had an insignificant impact on SSA’s agricultural domestic value-added exports to the U.S.A. In addition, being an AGOA recipient does not seem to affect a recipient’s decision to export domestic value-added agricultural products and has had an insignificant impact on the volume of agricultural domestic value-added exports to the U.S.A.