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 journalJournal articlepeer-review

    22 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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