The value of political connection: Evidence from the 2011 Egyptian revolution

Vinh Q.T. Dang, Erin P K SO*, Isabel K.M. Yan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


We manually construct a list of Egyptian exchange-traded firms that were connected to President Mubarak and use the sudden collapse of his 30-year regime in the 2011 Arab Spring, a natural experiment exogenous to Egyptian firms, to measure the value of this political connection. We find that connection to Mubarak had contributed significantly, about 22.4%, to firm value. Moreover, state-ownership and connection to Mubarak remained separate sources of political capital under the entrenched autocracy. Mubarak-connected firms experienced lower financial constraint before the collapse of the regime and debt-induced equity propping at the peak of the 2008 global crisis.

Original languageEnglish
Pages (from-to)238-257
Number of pages20
JournalInternational Review of Economics and Finance
Publication statusPublished - Jul 2018

Scopus Subject Areas

  • Finance
  • Economics and Econometrics

User-Defined Keywords

  • Egypt
  • Financial constraint
  • Firm value
  • Political connection
  • Propping


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