Essays on trade preferences of the USA and exports of developing countries
Cooke, Edgar F A
The African Growth and Opportunity Act (AGOA) and the Caribbean Basin Trade Protection\ud Act (CBTPA) of the USA are trade preference programmes offering reduced tariffs to African\ud countries. We investigate the impact of the preferences on the exports of the recipients in this\ud thesis. Using annual data on mirror exports, macroeconomic, social, cultural and religious variables,\ud we evaluate the impact of the preferences in three different ways—(1) difference-in-differences,\ud (2) quantile and (3) matching estimators. As part of our review of the empirical evidence, we\ud conduct a meta-analysis to summarise the quantitative AGOA literature. This is augmented with a\ud meta-regression to investigate the presence of publication bias. In chapter 3, the first of the three\ud empirical chapters, the question asked is, “has there been an observed increase in the exports of\ud AGOA and CBTPA recipients to the USA compared to their exports to the rest of the world?”\ud The identification of the impact consists of modelling the selection in exporting that occurs and\ud accounting for the zero trade occurring at the HS-6 digit level of disaggregation. One result is that,\ud the impact of the preference varies with the level of product aggregation.\ud \ud The two remaining chapters focus on the AGOA preference and is identified due to the exogenous\ud provision of the preference. Chapter 4 adopts a matching approach while chapter 5 is based\ud on a quantile regression. The matching estimates providing the mean impacts are negative for\ud exports to the USA compared to the counter-factual. In Chapter 5, we show that, the impact of\ud the preference on the recipients is unequal—oil exporters are the largest gainers. We decompose\ud the impact by using the Oaxaca-Blinder decomposition found in Machado and Mata (2005) for\ud quantile regressions. We find that, the gains to AGOA recipients are confined to the top half of the\ud export distribution—implying that the gains from AGOA are unequal and thus heterogeneous in\ud their impact on the recipients.
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