Entrepreneurship And Informal Economy In Africa

Aïcha Tiendrebeogo ()
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Aïcha Tiendrebeogo: Ecole Polytechnique de Ouagadougou/University of Thomas SANKARA

Economics Bulletin, 2023, vol. 43, issue 1, 613 - 628

Abstract: The objective of this paper is to analyze the effects of regulations introduced in the field of entrepreneurship on the size of the informal sector in African countries over the period 2004-2017. For this, the study used the system-based GMM method for linear analysis and the threshold effect model for non-linear analysis. It appears that the ease of entrepreneurship, that is to say less procedure to open a business, a lower cost, less time, and the need for a lower minimum capital, favor the reduction of the size the informal sector. It also emerges that the increase in real GDP per capita, human capital, but also institutional factors such as the fight against corruption, government efficiency and the quality of regulations, are factors that favor the decline of the informal sector. On the other hand, the unemployment rate is a factor exacerbating the size of the informal sector. Finally, it turns out that the size of the informal sector and the ease of doing business have a non-linear relationship.

Keywords: Informal economy; Entrepreneurship; GMM estimator; Dynamic Panel Threshold Model (search for similar items in EconPapers)
JEL-codes: M2 O1 (search for similar items in EconPapers)
Date: 2023-03-30
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