Distressed Whales on the Nile – Egypt Capitalists in the Wake of the 2010 Revolution

The paper studies the nature and extent of business privileges in Egypt by looking at corporate development and stock market valuation of traded firms before and after the revolution. First, we identify politically connected firms and conduct an event study around the revolution of 2010-11 (and around events with rumors about Mubarak’s health) to estimate the market valuation of political connections. Second, we look for the advantages provided by these connections by looking at the corporate behavior of connected firms before the revolution. Finally, we compare the financial returns of connected and non connected firms and contrast them with the market valuation of connections, and with the benefits they actually received in the past, to draw some characterization of the political economy of business state relations in Egypt during the past decade.  

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