The impact of digital financial inclusion on the informal economy in Algeria using the Threshold Regression model
Keywords:
Digital Financial Inclusion, Informal Economy, Threshold Regression ModelAbstract
This study aims to measure the impact of digital financial inclusion on the informal economy in Algeria during the period 2008–2022, using six-year interval data and relying on the Threshold Regression (TR) model. It seeks to determine whether the digital financial inclusion index is below or above the optimal threshold required to achieve a decline in the proportion of the informal economy to its maximum level.
The results indicate that the optimal digital financial inclusion index is greater than 2.219274%. Once this threshold is exceeded, the proportion of the informal economy in Algeria begins to decline. The digital financial inclusion parameter, as estimated by the model, was 0.46, meaning that a 1% increase in digital financial inclusion results in a 0.46% reduction in the informal economY.
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