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Hermann Ndoya Hegueu and Aristophane Djeufack dongmo
''Urbanization, Governance and Informal Economy: an African Tale.''
( 2021, Vol. 41 No.3 )
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.
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
O1 - Economic Development: General
Manuscript Received : Sep 17 2021 Manuscript Accepted : Sep 17 2021

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