Effect of Natural Resources on the Size of Informal Economy in sub-Saharan Africa: An Empirical Investigation

Kpognon, Koffi

doi:10.1016/j.strueco.2022.08.005

Cited by 6 publications

(5 citation statements)

References 58 publications

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“…, 2007; Hidalgo, 2015). A similar conclusion has been found for the case of 44 less developed African countries (Kpognon, 2022).…”

Section: Discussion Of Resultssupporting

confidence: 81%

“…These results are in line with Lust (2019), Blanton andPeksen (2021), andRodrik (2016) who argue that countries with primary economies and lower levels of industrialization experience higher levels of informal activities, or failing that, lower levels of development associated with informality (Hausmann et al, 2007;Hidalgo, 2015). A similar conclusion has been found for the case of 44 less developed African countries (Kpognon, 2022).…”

Section: Informal Economy In Latin American Countriessupporting

confidence: 86%

“…Moreover, the manufacturing sector in developing countries is usually labor intensive (Collier and Page, 2009), and therefore, it is capable of absorbing labor from the informal sector. Therefore, a productive structure primarily based on natural resources constrains the ability of economies to create good jobs in the formal sector (Blanton and Peksen, 2021), especially in less developed countries (Kpognon, 2022). In fact, Rodrik (2016) argues that the increase in informality in Latin America relates to the decrease in the volume of manufacturing activities.…”

Section: Productive Structure and Informal Economymentioning

confidence: 99%

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Exploring the relationship between productive structure and the informal economy: evidence from Latin American countries

Salinas,

Ortiz

2024

JEPP

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Purpose The purpose of this study is to examine the relationship between the productive structure and the size of the informal economy in Latin American countries.Design/methodology/approach The study employs econometric techniques for panel data covering the period from 2002 to 2017 and considering 17 Latin American countries. The evidence presented is based on the informal economy data generated by Medina and Schneider (2018) who estimate the size of the informal economy using a structural equation model and the share of manufacturing in total employment as a measure of the size of the manufacturing sector. Also, the study addresses the possible endogeneity bias in the relationship studied and makes the conclusions more robust, thus avoiding spurious correlations that weaken the findings.Findings The results indicate that most industrialized Latin American countries are associated with a smaller size of the informal economy.Practical implications The findings have important policy implications, as they suggest that Latin American economies need to switch the structure of the economy toward more sophisticated productive structures if they want to reduce the size of the informal economy. Thus, more efforts should be deployed to policies to diversify and upgrade economies.Originality/value The study contributes to the literature on the informal economy by connecting the country’s productive structure and informality. Specifically, the results show that the productive structure of countries is a plausible explanation for the size of the informal economy.

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“…, 2007; Hidalgo, 2015). A similar conclusion has been found for the case of 44 less developed African countries (Kpognon, 2022).…”

Section: Discussion Of Resultssupporting

confidence: 81%

Section: Informal Economy In Latin American Countriessupporting

confidence: 86%

Section: Productive Structure and Informal Economymentioning

confidence: 99%

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Exploring the relationship between productive structure and the informal economy: evidence from Latin American countries

Salinas,

Ortiz

2024

JEPP

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“…Moreover, informality has been shown to precipitate macroeconomic instability, with implications for the design of monetary policy (Elgin & Iyidost, 2022). In addition, informality has been shown to be higher among resource‐dependent countries (Kpognon, 2022), and to be negatively associated with financial sector development (Berdiev & Saunoris, 2016; Capasso et al, 2022), and the international diffusion of technology from foreign direct investment (Elgin, 2021). This literature shows that informality can affect growth.…”

Section: Literature Reviewmentioning

confidence: 99%

“…For this reason, the study controls for natural resource dependence in the model, consistent with the literature showing that commodity dependence presents specific challenges for macroeconomic management and growth (Mawejje, 2019; Van der Ploeg, 2011). Moreover, natural resources have been shown to impact informality (Kpognon, 2022). Second, the study includes in the model a measure of financial sector development, consistent with the literature showing the impact of financial sector development on both growth (Levine, 2005) and informality (Berdiev & Saunoris, 2016; Capasso et al, 2022).…”

Section: Data Sources and Empirical Strategymentioning

confidence: 99%

Government expenditure, informality, and economic growth: Evidence from Eastern and Southern African countries

Mawejje

2024

African Development Review

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This study investigates the dynamic linkages among government expenditure, informality, and economic growth in 15 Eastern and Southern African countries over a 25‐year period during 1991–2015. The analysis exploits panel vector autoregressive models to construct the time path of one variable following an orthogonal shock to another variable using impulse response functions. The analysis is complemented by panel quantile regressions to investigate the potential role of informality in the expenditure–economic growth nexus. The findings are threefold. First, both government consumption and investment expenditure have positive and significant effects on real per capita GDP. Second, informality has a direct negative impact on real per capita GDP. Third, the informal sector dampens the impact of government expenditure on real per capita GDP. These results are robust to the inclusion of selected control variables and are unchanged across GDP quantiles. The study's findings suggest that government policies aimed at reducing informality can have direct impacts on economic growth and indirect impacts through improvements in the effectiveness of government expenditure.

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Hide and Seek: Female Parliamentarians and the Informal Economy

Lv,

Pan,

2024

J Knowl Econ

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Effect of Natural Resources on the Size of Informal Economy in sub-Saharan Africa: An Empirical Investigation

Cited by 6 publications

References 58 publications

Exploring the relationship between productive structure and the informal economy: evidence from Latin American countries

Exploring the relationship between productive structure and the informal economy: evidence from Latin American countries

Government expenditure, informality, and economic growth: Evidence from Eastern and Southern African countries

Hide and Seek: Female Parliamentarians and the Informal Economy

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