Can Innovation Reduce the Size of the Informal Economy?

Dorgyles C. M. Kouakou () and Kolotioloma I. H. Yéo ()
Additional contact information
Dorgyles C. M. Kouakou: Université de Rennes, CNRS, CREM - UMR 6211
Kolotioloma I. H. Yéo: CAPEC and Université Alassane Ouattara

Comparative Economic Studies, 2025, vol. 67, issue 3, No 5, 623-681

Abstract: Abstract This paper contributes to the literature on the determinants of informality by examining the effect of innovation production on the size of the informal economy, using a sample of 131 countries over the period 2009-2018. Econometric estimations reveal that innovation reduces the size of the informal economy, underscoring the importance of public innovation policies in addressing informality, with potential benefits for tax revenue mobilization. This result remains robust across various controls, alternative estimation techniques, restricted samples, and different measures of both informality and innovation. Economic development, domestic credit mobilization, and e-government are highlighted as key channels through which innovation influences the informal economy.

Keywords: Informal economy; Innovation; Tax revenue mobilization; Transmission channels (search for similar items in EconPapers)
JEL-codes: E26 H26 O17 O31 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41294-025-00260-6 Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:compes:v:67:y:2025:i:3:d:10.1057_s41294-025-00260-6

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-025-00260-6

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().