Informal Sector, Competition and Labor Productivity in Africa: Evidence from Firm-Level Data

Sara Zouiri ()
Additional contact information
Sara Zouiri: Mohammed V University in Rabat

No 1689, Working Papers from Economic Research Forum

Abstract: The informal sector, a key feature of African economies, can cause significant distortions that result in loss of growth and constrain countries’ development. Many papers have shown that at the firm level, the informal sector may impact the performance of the formal sector through competition. The purpose of this study is to examine the relationship between informal sector competition and labor productivity in the formal sector in Africa. To this end, we use data from the World Bank Enterprise Survey (WBES) conducted between 2009 and 2020 for 36 African countries. The regression results reveal a negative and statistically significant relationship between informal sector competition and labor productivity. The policy implications are twofold. First, policies to reduce the size of the informal sector and/or prevent negative spillovers from informal competition are required to improve productivity. Second, in order to stimulate the formal sector and promote its expansion, policy measures to improve the macroeconomic and institutional context of the region are needed.Length: 25

Date: 2023-12-20, Revised 2023-12-20
New Economics Papers: this item is included in nep-afr, nep-dev, nep-eff, nep-iue and nep-sbm
References: Add references at CitEc
Citations:

Published by The Economic Research Forum (ERF)

Downloads: (external link)
https://erf.org.eg/publications/informal-sector-co ... m-firm-level-data-2/ (application/pdf)
https://bit.ly/3vjAVIK (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:1689

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().