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Does ICTs decrease the spread of informal economy in Africa?

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  • Ndoya, Hermann
  • Okere, Donald
  • Belomo, Marie laure
  • Atangana, Melissa

Abstract

This paper assesses the effect of information and communication technologies (ICTs) on the informal economy. We applied the Generalized Method of Moments (GMM) on a sample of 45 African countries from 2000 to 2017. According to the findings, the use of ICTs (mobile phone and internet) decreases the spread of the informal economy in Africa. These results are robust to a battery of robustness checks. Furthermore, the results of the mediation analysis show that the effect of ICTs on the informal economy is mediated by financial development, human capital and control of corruption. From a policy perspective, we suggest a quantitative and qualitative consolidation of technological infrastructures, for a sustainable mitigation of the rise of informal sector in Africa.

Suggested Citation

  • Ndoya, Hermann & Okere, Donald & Belomo, Marie laure & Atangana, Melissa, 2023. "Does ICTs decrease the spread of informal economy in Africa?," Telecommunications Policy, Elsevier, vol. 47(2).
    • Handle: RePEc:eee:telpol:v:47:y:2023:i:2:s0308596122001872
    DOI: 10.1016/j.telpol.2022.102485
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    2. KOUAKOU, Dorgyles C.M. & YEO, Kolotioloma I.H., 2023. "Can innovation reduce the size of the informal economy? Econometric evidence from 138 countries," MPRA Paper 119264, University Library of Munich, Germany.
    3. Erumban, Abdul A., 2024. "Informality and aggregate labor productivity growth: Does ICT moderate the relationship?," Telecommunications Policy, Elsevier, vol. 48(1).
    4. Di Wang & Jianing Sun & Renhao Yang & Kangchuan Su & Qingyuan Yang, 2024. "ICTs and economic performance nexus: meta-analysis evidence from country-specific data," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    5. Siyasanga Mgoduka & I. Kaseeram & S. Heeralal, 2024. "An Analysis of the Effectiveness of Information and Communication Technology Technologies in Providing Customer Feedback to Enhance B2C Value Co-creation: A Focus on the Tourism Industry," International Review of Management and Marketing, Econjournals, vol. 14(4), pages 83-91, July.
    6. Mwananziche, Josephat & Myovella, Godwin & Karacuka, Mehmet & Haucap, Justus & Moshi, Goodiel, 2023. "Is digitalization a booster for economic growth in Africa? Short run and long run evidence from Tanzania," Telecommunications Policy, Elsevier, vol. 47(10).
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    More about this item

    Keywords

    ICTs; Informal economy; Africa; GMM;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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