n Ghanaian Journal of Economics - Preferential trade agreements, employment and productivity : evaluating the impacts of AGOA and its apparel provisions on African firms
|Article Title||Preferential trade agreements, employment and productivity : evaluating the impacts of AGOA and its apparel provisions on African firms|
|© Publisher:||The African Finance & Economics Consult|
|Journal||Ghanaian Journal of Economics|
|Affiliations||1 African centre for Economic Transformation, Ghana|
|Publication Date||Dec 2015|
|Pages||4 - 27|
|Keyword(s)||Africa, Employment, Firms, Preferential trade agreements and Productivity|
We evaluate the impacts of general African Growth and Opportunities Act (AGOA) eligibility and eligibility for its apparel provision on firm-level employment and productivity. Based on the Stolper-Samuelson theorem, we hypothesized that AGOA would positively affect firm employment and productivity. In order to unbiasedly evaluate the impact of the policies and address both the limitations associated with non-experimental data and potential spillover effects, we used a difference- in-difference-in-differences specification to specifically account for both country- level and industry-level confounders in our empirical analysis. results show that while aGoa and its apparel provision's impacts on employment are weak, they exerted a positive impact on firm productivity. This productivity growth was due to a reallocation of economic activities from less productive to more productive firms. As sub-Saharan African countries consider new trade agreements, such as Economic Partnership agreements (EPas), our paper recommends a review of important factors, such as customs efficiency, business licensing and permit delays, and regulation burden, as they will influence the extent to which firms can benefit from these agreements.
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