Conference Paper
Revolutionary Changes in Institutions and Firm Exports
No.
ERF32AC_12
Publisher
ERF
Date
May, 2026
Topic
D7. Analysis of Collective Decision-Making
F1. Trade
In general, it is difficult to identify the impact of institutions on trade due to well-known endogeneity problems. This is why we need a shock on institutions that is orthogonal to (same time) trade flows. One of these shocks can be revolutions, being defined as a radical overthrow of a regime by a movement of revolt, leading to the destruction of current institutions to rebuild new ones. Hence, in this paper, we ask what happens to firm level exports in an unstable period of a revolutionary change in institutions. To do so, we choose Egypt’s 2011-revolution as it can be considered a quasi-natural experiment to study different sub-periods of transitions and de jure institutional changes in quite short period. We use firm-level exports data at monthly levels Egyptian Customs data from January 2005 to October 2016. Exports are observed at the firm, product (hs4), destination and monthly levels. Our main findings show that exporters are hurt, as expected, in the wake of a revolution. However, the absence of institutions (period of transitions) might hurt less than the setting of new, yet unconsolidated, institutions (non-market friendly/non-liberal institutions). In addition, the extensive margin appears to contribute to aggregate export losses more than the intensive margin (consistent with uncertainty to matter more than observable transaction costs per se). Finally, some informal or private institutions (long-term relationships/networks, cultural networks) appear as a substitute (dampen the losses from absence of institutions).
Authors
Daniel Mirza
Professor of Economics (Tours, Loire Valley, France)
Research Fellows
Chahir Zaki
Chaired Professor of Economics, University of Orléans