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Urbanization, Governance and Informal Economy: an African Tale

Hermann Ndoya () and Aristophane Djeufack dongmo ()
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Aristophane Djeufack dongmo: University of Dschang, Cameroon

Economics Bulletin, 2021, vol. 41, issue 3, 1525-1540

Abstract: Using system Generalized Method of Moments (GMM), and Panel Smooth Transition Regression (PSTR) on an unbalanced panel data of 45 African countries over the period 2000-2015, this paper empirically analyzes the role of governance in the relationship between urbanization and informal economy. Our results show that there is a reverse U-shaped relationship between urbanization and the informal economy. At the earlier stage, urbanization increases informal economy in Africa, and in the later stage the effect of urbanization on informal economy decreases with the interaction of governance quality.

Keywords: Urbanization; Governance; Informal economy; U-shaped relationship; Africa. (search for similar items in EconPapers)
JEL-codes: E2 O1 (search for similar items in EconPapers)
Date: 2021-09-17
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