Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt

This paper uses an original database of 469 politically connected firms under the Mubarak regime in Egypt to explore the economic effects of close state-business relations. Previous research has shown that political connections are lucrative. The p...

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Main Authors:	Diwan, Ishac, Keefer, Philip, Schiffbauer, Marc
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	EMPLOYMENT FINANCIAL SERVICES AUTOMOBILE HOLDING COMPANIES COMPETITORS DOMAINS EQUIPMENT BUSINESS OPPORTUNITIES PARTY FINANCIAL MANAGEMENT TELECOMMUNICATION GUARANTEES ENTERPRISE SURVEY VIDEO INFORMATION ENTREPRENEURS ENTREPRENEURIAL SKILL MANUFACTURERS COMPANIES MARKET SHARES TRANSMISSION LOAN TRACEABILITY FIRM SIZE PRICE RETAIL TRADE LISTED COMPANIES TIME PERIOD PC BUSINESS RELATIONS BRANCH COMPUTER CUSTOMS CLEARANCE OPEN ACCESS TELEVISION NEW TECHNOLOGIES INSTITUTIONS ADVERTISING DATA MARKET ENTRY COLLUSION GOVERNMENT REGULATIONS FINANCIAL INSTITUTION TELECOMMUNICATIONS FIRM SIZES INCOME INEQUALITY LICENSE REGULATORY BURDEN CUSTOMS PRODUCTIVITY GOVERNMENT CONTRACTS TELEPHONY GLOBALIZATION BUSINESS SERVICES BARRIERS TO ENTRY MARKETS FIRM LAWYERS WEB LINKS LENDERS LOANS LICENSING SUBSIDIES RADIO STORES GOVERNMENT SERVICES TRANSACTIONS MANUFACTURING USERS INTERNATIONAL STANDARDS GRANT TRANSACTION INVESTORS FIRMS INSPECTION PROCUREMENT RESULTS MARKET PRICES VALUE REGULATORY ENVIRONMENT ELECTRICITY MACROECONOMICS NETWORKS FINANCIAL PERFORMANCE ENTERPRISE PRODUCT CATEGORY EXPORT PROMOTION JOB CREATION RETAIL SALE PRIVATE SECTOR MARKET COMPANY MARKET COMPETITION ADMINISTRATION SHAREHOLDERS RESULT TAXATION GOVERNMENT POLICIES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES INVESTOR LAND LICENSES BUSINESS SECTOR BUSINESS PERFORMANCE PUBLIC ADMINISTRATION BUSINESS” INDICATORS INSPECTIONS GOVERNMENT SERVICE INNOVATION ECONOMIC ACTIVITIES INSTITUTION PROFIT COMMUNICATION BUSINESS REGULATIONS SMALL FIRMS GOVERNMENT CONTRACT DATABASE PROFITS TECHNOLOGIES SEE GROWTH POTENTIAL MOTION PICTURE GUARANTEE PRICES USES INNOVATIONS
Online Access:	http://documents.worldbank.org/curated/en/2015/07/24744323/pyramid-capitalism-political-connections-regulation-firm-productivity-egypt http://hdl.handle.net/10986/22236

id	okr-10986-22236
recordtype	oai_dc
spelling	okr-10986-222362021-04-23T14:04:07Z Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt Diwan, Ishac Keefer, Philip Schiffbauer, Marc EMPLOYMENT FINANCIAL SERVICES AUTOMOBILE HOLDING COMPANIES COMPETITORS DOMAINS EQUIPMENT BUSINESS OPPORTUNITIES PARTY FINANCIAL MANAGEMENT TELECOMMUNICATION GUARANTEES ENTERPRISE SURVEY VIDEO INFORMATION ENTREPRENEURS ENTREPRENEURIAL SKILL MANUFACTURERS COMPANIES MARKET SHARES TRANSMISSION LOAN TRACEABILITY FIRM SIZE PRICE RETAIL TRADE LISTED COMPANIES TIME PERIOD PC BUSINESS RELATIONS BRANCH COMPUTER CUSTOMS CLEARANCE OPEN ACCESS TELEVISION NEW TECHNOLOGIES INSTITUTIONS ADVERTISING DATA MARKET ENTRY COLLUSION GOVERNMENT REGULATIONS FINANCIAL INSTITUTION TELECOMMUNICATIONS FIRM SIZES INCOME INEQUALITY LICENSE REGULATORY BURDEN CUSTOMS PRODUCTIVITY GOVERNMENT CONTRACTS TELEPHONY GLOBALIZATION BUSINESS SERVICES BARRIERS TO ENTRY MARKETS FIRM LAWYERS WEB LINKS LENDERS LOANS LICENSING SUBSIDIES RADIO STORES GOVERNMENT SERVICES TRANSACTIONS MANUFACTURING USERS INTERNATIONAL STANDARDS GRANT TRANSACTION INVESTORS FIRMS INSPECTION PROCUREMENT RESULTS MARKET PRICES VALUE REGULATORY ENVIRONMENT ELECTRICITY MACROECONOMICS NETWORKS FINANCIAL PERFORMANCE ENTERPRISE PRODUCT CATEGORY EXPORT PROMOTION JOB CREATION RETAIL SALE PRIVATE SECTOR MARKET COMPANY MARKET COMPETITION ADMINISTRATION SHAREHOLDERS RESULT TAXATION GOVERNMENT POLICIES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES INVESTOR LAND LICENSES BUSINESS SECTOR BUSINESS PERFORMANCE PUBLIC ADMINISTRATION BUSINESS” INDICATORS INSPECTIONS GOVERNMENT SERVICE INNOVATION ECONOMIC ACTIVITIES INSTITUTION PROFIT COMMUNICATION BUSINESS REGULATIONS SMALL FIRMS GOVERNMENT CONTRACT DATABASE PROFITS TECHNOLOGIES SEE GROWTH POTENTIAL MOTION PICTURE GUARANTEE PRICES USES INNOVATIONS This paper uses an original database of 469 politically connected firms under the Mubarak regime in Egypt to explore the economic effects of close state-business relations. Previous research has shown that political connections are lucrative. The paper addresses several questions raised by this research. Do connected firms receive favorable regulatory treatment? They do: connected firms are more likely to benefit from trade protection, energy subsidies, access to land, and regulatory enforcement. Does regulatory capture account for the high value of connected firms? In the sample, regulatory capture as revealed by energy subsidies and trade protection account for the higher profits of politically connected firms. Do politically connected firms hurt aggregate growth? The paper identifies the growth effects of the entry of politically connected firms by comparing detailed 4-digit sectors where they entered, between 1996 and 2006, and sectors that remained unconnected. The entry of connected firms into new, modern, and previously unconnected sectors slows aggregate employment growth and skews the distribution of employment toward less productive, smaller firms. 2015-07-20T15:28:40Z 2015-07-20T15:28:40Z 2015-07 Working Paper http://documents.worldbank.org/curated/en/2015/07/24744323/pyramid-capitalism-political-connections-regulation-firm-productivity-egypt http://hdl.handle.net/10986/22236 English en_US Policy Research Working Paper;No. 7354 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Middle East and North Africa Egypt, Arab Republic of
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	EMPLOYMENT FINANCIAL SERVICES AUTOMOBILE HOLDING COMPANIES COMPETITORS DOMAINS EQUIPMENT BUSINESS OPPORTUNITIES PARTY FINANCIAL MANAGEMENT TELECOMMUNICATION GUARANTEES ENTERPRISE SURVEY VIDEO INFORMATION ENTREPRENEURS ENTREPRENEURIAL SKILL MANUFACTURERS COMPANIES MARKET SHARES TRANSMISSION LOAN TRACEABILITY FIRM SIZE PRICE RETAIL TRADE LISTED COMPANIES TIME PERIOD PC BUSINESS RELATIONS BRANCH COMPUTER CUSTOMS CLEARANCE OPEN ACCESS TELEVISION NEW TECHNOLOGIES INSTITUTIONS ADVERTISING DATA MARKET ENTRY COLLUSION GOVERNMENT REGULATIONS FINANCIAL INSTITUTION TELECOMMUNICATIONS FIRM SIZES INCOME INEQUALITY LICENSE REGULATORY BURDEN CUSTOMS PRODUCTIVITY GOVERNMENT CONTRACTS TELEPHONY GLOBALIZATION BUSINESS SERVICES BARRIERS TO ENTRY MARKETS FIRM LAWYERS WEB LINKS LENDERS LOANS LICENSING SUBSIDIES RADIO STORES GOVERNMENT SERVICES TRANSACTIONS MANUFACTURING USERS INTERNATIONAL STANDARDS GRANT TRANSACTION INVESTORS FIRMS INSPECTION PROCUREMENT RESULTS MARKET PRICES VALUE REGULATORY ENVIRONMENT ELECTRICITY MACROECONOMICS NETWORKS FINANCIAL PERFORMANCE ENTERPRISE PRODUCT CATEGORY EXPORT PROMOTION JOB CREATION RETAIL SALE PRIVATE SECTOR MARKET COMPANY MARKET COMPETITION ADMINISTRATION SHAREHOLDERS RESULT TAXATION GOVERNMENT POLICIES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES INVESTOR LAND LICENSES BUSINESS SECTOR BUSINESS PERFORMANCE PUBLIC ADMINISTRATION BUSINESS” INDICATORS INSPECTIONS GOVERNMENT SERVICE INNOVATION ECONOMIC ACTIVITIES INSTITUTION PROFIT COMMUNICATION BUSINESS REGULATIONS SMALL FIRMS GOVERNMENT CONTRACT DATABASE PROFITS TECHNOLOGIES SEE GROWTH POTENTIAL MOTION PICTURE GUARANTEE PRICES USES INNOVATIONS
spellingShingle	EMPLOYMENT FINANCIAL SERVICES AUTOMOBILE HOLDING COMPANIES COMPETITORS DOMAINS EQUIPMENT BUSINESS OPPORTUNITIES PARTY FINANCIAL MANAGEMENT TELECOMMUNICATION GUARANTEES ENTERPRISE SURVEY VIDEO INFORMATION ENTREPRENEURS ENTREPRENEURIAL SKILL MANUFACTURERS COMPANIES MARKET SHARES TRANSMISSION LOAN TRACEABILITY FIRM SIZE PRICE RETAIL TRADE LISTED COMPANIES TIME PERIOD PC BUSINESS RELATIONS BRANCH COMPUTER CUSTOMS CLEARANCE OPEN ACCESS TELEVISION NEW TECHNOLOGIES INSTITUTIONS ADVERTISING DATA MARKET ENTRY COLLUSION GOVERNMENT REGULATIONS FINANCIAL INSTITUTION TELECOMMUNICATIONS FIRM SIZES INCOME INEQUALITY LICENSE REGULATORY BURDEN CUSTOMS PRODUCTIVITY GOVERNMENT CONTRACTS TELEPHONY GLOBALIZATION BUSINESS SERVICES BARRIERS TO ENTRY MARKETS FIRM LAWYERS WEB LINKS LENDERS LOANS LICENSING SUBSIDIES RADIO STORES GOVERNMENT SERVICES TRANSACTIONS MANUFACTURING USERS INTERNATIONAL STANDARDS GRANT TRANSACTION INVESTORS FIRMS INSPECTION PROCUREMENT RESULTS MARKET PRICES VALUE REGULATORY ENVIRONMENT ELECTRICITY MACROECONOMICS NETWORKS FINANCIAL PERFORMANCE ENTERPRISE PRODUCT CATEGORY EXPORT PROMOTION JOB CREATION RETAIL SALE PRIVATE SECTOR MARKET COMPANY MARKET COMPETITION ADMINISTRATION SHAREHOLDERS RESULT TAXATION GOVERNMENT POLICIES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES INVESTOR LAND LICENSES BUSINESS SECTOR BUSINESS PERFORMANCE PUBLIC ADMINISTRATION BUSINESS” INDICATORS INSPECTIONS GOVERNMENT SERVICE INNOVATION ECONOMIC ACTIVITIES INSTITUTION PROFIT COMMUNICATION BUSINESS REGULATIONS SMALL FIRMS GOVERNMENT CONTRACT DATABASE PROFITS TECHNOLOGIES SEE GROWTH POTENTIAL MOTION PICTURE GUARANTEE PRICES USES INNOVATIONS Diwan, Ishac Keefer, Philip Schiffbauer, Marc Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt
geographic_facet	Middle East and North Africa Egypt, Arab Republic of
relation	Policy Research Working Paper;No. 7354
description	This paper uses an original database of 469 politically connected firms under the Mubarak regime in Egypt to explore the economic effects of close state-business relations. Previous research has shown that political connections are lucrative. The paper addresses several questions raised by this research. Do connected firms receive favorable regulatory treatment? They do: connected firms are more likely to benefit from trade protection, energy subsidies, access to land, and regulatory enforcement. Does regulatory capture account for the high value of connected firms? In the sample, regulatory capture as revealed by energy subsidies and trade protection account for the higher profits of politically connected firms. Do politically connected firms hurt aggregate growth? The paper identifies the growth effects of the entry of politically connected firms by comparing detailed 4-digit sectors where they entered, between 1996 and 2006, and sectors that remained unconnected. The entry of connected firms into new, modern, and previously unconnected sectors slows aggregate employment growth and skews the distribution of employment toward less productive, smaller firms.
format	Working Paper
author	Diwan, Ishac Keefer, Philip Schiffbauer, Marc
author_facet	Diwan, Ishac Keefer, Philip Schiffbauer, Marc
author_sort	Diwan, Ishac
title	Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt
title_short	Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt
title_full	Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt
title_fullStr	Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt
title_full_unstemmed	Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt
title_sort	pyramid capitalism : political connections, regulation, and firm productivity in egypt
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/07/24744323/pyramid-capitalism-political-connections-regulation-firm-productivity-egypt http://hdl.handle.net/10986/22236
_version_	1764450496923303936

Pyramid Capitalism : Political Connections, Regulation, and Firm Productivity in Egypt

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