Four Essays in International Trade and Economic Development

Abstract

This dissertation comprises four essays investigating the impact of trade agreements on trade outcomes and the relationship between export diversification and economic growth. Chapter 1 investigates the effect of the U.S. African Growth and Opportunity Act (AGOA) on Sub-Saharan African (SSA) countries’ exports to the U.S. We used synthetic control method and U.S.-AGOA data. The study reveals that AGOA member nations experienced a significant $818.11 million annual increase (42%) in exports compared to levels expected without AGOA. The impact varied across countries and product types, with agricultural, mineral, and textile/apparel exports surging annually by 42%, 15%, and 52%, respectively. This was validated using difference-in-differences and event study approaches, confirming the robustness of the findings. Chapter 2 focuses on the impact of Brexit on trade flows between the United Kingdom (UK) and the European Union (EU) and the rest of the world (ROW). I used trade data from BACI and CEPII Gravity Database. The study employed a difference-in-difference approach integrated into the gravity model framework and estimated using the Heckman selection model. Brexit led to reduced UK imports and exports values with both the EU and ROW, affecting durable and non-durable goods. In the UK, the import value from the EU decreased by 0.41%, whereas imports from the rest of the world (ROW) dropped by 0.20%. Specifically, imports of durable goods from the EU and ROW declined by 0.39% and 0.24%, respectively. Non-durable goods also saw decreases in imports, with a 0.41% fall from the EU and a 0.18% drop from the ROW. Conversely, UK exports faced declines as well, with a 0.86% decrease in total export value to the EU and a 0.47% decrease in export value to the ROW. Durable goods exports from the UK experienced a 0.64% decrease to the EU and a 0.61% decrease to the ROW. Non-durable goods exports followed a similar trend, declining by 0.91% to the EU and 0.43% to the ROW. These results are supported by robustness checks using various methods. Chapter 3 explores how the North American Free Trade Agreement (NAFTA) unrestricted sugar trade agreement impacted sugar consumption and diabetes prevalence in the United States. We applied methods including synthetic control method, difference-in-difference, and panel event-study to estimate the impact of the policy using sugar consumption and health data for seven countries. Post-agreement, US sugar consumption increased annually by 16% (5240g per capita), corresponding to a 1% annual rise in diabetes prevalence, incurring an estimated $324.37 million yearly. State-level impacts varied, notably affecting areas with specific demographic characteristics such as higher poverty level, greater Black population, lower percentage of the population with a high school degree, and higher percent female population. Chapter 4 investigates the relationship between export diversification and economic growth in thirty-nine Sub-Saharan African countries. We used macroeconomic data from United Nations Conference on Trade and Development (UNCTAD) and the Arellano-Bond difference generalized method-of-moment estimator, the study finds positive economic growth effects with better corruption control and governance quality, showcasing export diversification beyond the growth-optimized level. This was confirmed through robustness checks using country-fixed effect regression, ensuring the stability of the findings.