Urbanization, Industrialization and Inequalities in Africa:  does threshold matter?

Bruno Emmanuel ONGO NKOA; Richard ZOGO EKASSI; Jaques Simon Song

doi:10.18535/ijsrm/v9i08.em01

Abstract

This paper examines the impact of urbanization and industrialization on observed inequalities in a sample of 48 African countries. We specify and estimate a panel data model using the Generalized Method of Moments-System (GMM-S) over the period 1980-2016 along the different dimensions of inequality. Our results show that urbanization increases income, environmental and housing inequalities in Africa, while industrialization reduces them. Our results remain robust with the use of Panel Smooth Transition Regression Model (PSTR) and Panel Transition Regression Model (PTR). We suggest taking into account the disparities identified in the inclusive urbanization and industrialization policies of African cities.

Keywords

AfricaGMM-SIndustrializationInequalitiesUrbanization

References

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Arellano. M., & Bover O (1995). Another Look at the Instrumental-Variable Estimation of Error-Components Models. Journal of Econometrics, 68, 29-52.Google Scholar ↗
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[refR-2] Arellano. M., & Bond. S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies, 58, 277-297.Google Scholar ↗

[refR-3] Arellano. M., & Bover O (1995). Another Look at the Instrumental-Variable Estimation of Error-Components Models. Journal of Econometrics, 68, 29-52.Google Scholar ↗

[refR-4] BAfD/OCDE/PNUD (2017). Perspectives Economiques en Afrique 2017, Entrepreneuriat etGoogle Scholar ↗

[refR-5] Industrialisation, Editions OCDE, Paris, 344p.Google Scholar ↗

[refR-6] Behrens. K., Mion. G., Murata. Y., & Südekum. J. (2012) Spatial frictions. CEPR Discussion Paper #8572.Google Scholar ↗

[refR-7] Blundell. R., & Bond. S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87, 115-143.Google Scholar ↗

[refR-8] Bonaiuto. M., Aiello. A., Perugini. M., Bonnes. M., & Ercolani. P. (1999). Multidimensional perception of residential environment. Quality and neighborhood attachment in the urban environment». Journal of Environmental Psychology, 19, 331-352.Google Scholar ↗

[refR-9] Brunori. P., Palmisano. F., & Peragine. V. (2015). Inequality of opportunity in Sub-Saharan Africa in Policy Research Working Paper No. 7782. Washington, DC : World Bank.Google Scholar ↗

[refR-10] Chen. Z., & Zhou. Y. (2005). Income distribution during system reform and economic development in China: The status and trend of income inequality of Chinese residents. New York: Nova Science Pub Inc.Google Scholar ↗

[refR-11] Chen. X.-Y., (2010). Urbanization, industrialization and urban-rural income gap-Based on SVAR model. Economic Latitude and Longitude, 6, 21-24.Google Scholar ↗

[refR-12] Chen. B., Dan. L., & Ming. L. (2018). City size, migration and urban inequality in China. https://doi.org/10.1016/j.chieco.2018.05.001DOI ↗Google Scholar ↗

[refR-13] Fosu. A. (2018). Economic Structure, Growth, and Evolution of Inequality and Poverty in Africa: An Overview». Journal of African Economies, 27(1), 1-9.Google Scholar ↗

[refR-14] Kanbur. R., & Zhuang. J. (2013). Urbanization and inequality in Asia». Asian Development Review.Google Scholar ↗

[refR-15] Kuznets. S. (1955). Economic growth and income inequality. American Economic Review, 45, 1-28.Google Scholar ↗

[refR-16] Lachaud. J.-P. (2006). Urbanisation, pauvreté et capacités : nouveaux défis des stratégies de développement ? Une approche spatio-temporelle au Burkina Faso. Revue d’Économie Régionale & Urbaine, 3, 455-488.Google Scholar ↗

[refR-17] Liddle. B. (2017) Urbanization and Inequality/Poverty. Urban Science 1, doi:10.3390/urbansci1040035.DOI ↗Google Scholar ↗

[refR-18] Mahmood. S., & Noor. Z.-M. (2014). Human Capital and Income Inequality in Developing Countries: New Evidence Using the Gini Coefficient». Journal of Entrepreneurship and Business, 2(1), 40-48.Google Scholar ↗

[refR-19] Mehic. M., (2018). Industrial employment and income inequality: Evidence from panel data, <![CDATA[Structural Change and Economic Dynamics]]> (2018), https://doi.org/10.1016/j.strueco.2018.02.006DOI ↗Google Scholar ↗

[refR-20] Meunié. A. (2004). Controverses autour de la courbe environnementale de Kuznets, IFREDE-GRES/CED, Université Montesquieu Bordeaux IV Document de Travail/107/2004.Google Scholar ↗

[refR-21] ONU-Habitat, (2014), L’état des villes africaines 2014 : Réinventer la transition urbaine, Nairobi, Kenya, 278p.Google Scholar ↗

[refR-22] Shimeles. A., & Nabassaga. T. (2018). Why Is Inequality High in Africa? Journal of African Economies, 27(1), 108-126.Google Scholar ↗

[refR-23] Tsay. R. (1989). Testing and Modelling Threshold Autoregressive Processes. Journal of the America Statistical Association, 84, 231-240.Google Scholar ↗

[refR-24] Wei. Y.-D., Li. H., & Yue. W. (2017). Urban land expansion and regional inequality in transitional China. Landscape and Urban Planning, 163, 17-31.Google Scholar ↗

[refR-25] WHALLEY J, ZHANG S (2007) A numerical simulation analysis of (Hukou) labour mobility restrictions in China. Journal of Development Economics 83(2): 392-410.Google Scholar ↗

[refR-26] Wooldridge, J. (2013). Introductory Econometrics: A Modern Approach (Fifth Edition). Boston Cengage Learning Custom, 910 p.Google Scholar ↗

[refR-27] WU, D., & RAO, P. (2017) Urbanization and Income Inequality in China: An Empirical Investigation at Provincial Level. Soc Indic Res, 131, 189-214.Google Scholar ↗