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Urbanization, Governance and Informal Economy: an African Tale

Author

Listed:
  • Hermann Ndoya hegueu

    (University of Dschang, Cameroon)

  • Aristophane Djeufack dongmo

    (University of Dschang, Cameroon)

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.

Suggested Citation

  • Hermann Ndoya hegueu & Aristophane Djeufack dongmo, 2021. "Urbanization, Governance and Informal Economy: an African Tale," Economics Bulletin, AccessEcon, vol. 41(3), pages 1525-1540.
    • Handle: RePEc:ebl:ecbull:eb-21-00876
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    References listed on IDEAS

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    More about this item

    Keywords

    Urbanization; Governance; Informal economy; U-shaped relationship; Africa.;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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