A skeptics view of the AGOA preferences of the USA: A propensity score matching approach

Majority of the agoa impact literature have mainly resorted to regression analysis. In this paper, a change towards constructing a counter-factual set of countries is adopted. In doing this, the propensity score matching framework is used in estimating the average treatment effect on the treated (ATT) of the agoa policy on recipient countries. The results show that countries exporting to the USA did increase their shares of agoa exports while reducing their share under the most favoured nation tariffs. The exports levels on the other hand, are not significant in most cases. In comparing the shares of exports to the USA to those of the EU and rest of the world, an unambiguous decrease in the share of exports to the rest of the world is observed. However, the shares of exports to the USA and EU in most cases increased. The contribution of the paper is in providing a consistent and robust matching framework to study the agoa trade preferences.