Determinants of Kenyans Export Perfomance Under Agoa Trade Preference Regime

Abstract

The African Growth and Opportunities Act (AGOA) has been operational in Kenya since its inception in 2000.This study contrary to many Kenya-specific studies uses the gravity model to examine the determinants Kenya’s export performance to the US under AGOA from 1995 to 2014. Empirical results show that the presence AGOA increases trade flows by 0.08% while a percentage growth in apparels and textiles increases trade flow between Kenya and USA by about 1%. However, agricultural exports reduces exports by 0.07%. A percentage increase in the GDP of Kenya increased trade flows by 0.2% while a percentage increase in the GDP of USA decreases trade flow by 0.4%. A depreciation of currency by 1% increases trade flow by 0.5%. These results suggests there is need to enhance apparel exports besides maintaining macroeconomic soundness in terms of increasing Kenya’s GDP and depreciating the currency.