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Firm Performance and their Perception of Political Instability in Egypt: Evidence from an Endogenous Treatment Regression Model

Author

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  • Amr Hosny

    (International Monetary Fund, Washington D.C., USA)

Abstract
This paper employs a unique firm-level data covering for firms in the private sector in Egypt, to analyze whether firms' perception of political instability has an adverse effect on firm performance. The analysis covers 2,897 firms over the period 2009-2012. There are two main results: First, using OLS, we find a negative association between political instability and the growth of firms’ sales and employment. Second, using an endogenous treatment linear regression models, to correct for potential endogeneity, we find that political instability can even have a negative causal effect on firms' performance. The results are robust to different specifications.

Suggested Citation

  • Amr Hosny, 2018. "Firm Performance and their Perception of Political Instability in Egypt: Evidence from an Endogenous Treatment Regression Model," Journal of African Development, African Finance and Economic Association (AFEA), vol. 20(2), pages 61-68.
    • Handle: RePEc:afe:journl:v:20:y:2018:i:2:p:61-68
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    References listed on IDEAS

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    6. Rina Bhattacharya & HirutWolde, 2010. "Constraints on Trade in the MENA Region," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 65(3), pages 251-272, September.
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    Cited by:

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    2. Ernest Ouédraogo & Ibrahim Ouédraogo & Emmanuel Lompo, 2020. "Political Instability and Firm Performance: A Microeconomic Evidence from Ivory Coast," American Journal of Economics and Business Administration, Science Publications, vol. 12(1), pages 49-55, October.
    3. Zhang, Wenwen & Chiu, Yi-Bin & Hsiao, Cody Yu-Ling, 2022. "Effects of country risks and government subsidies on renewable energy firms’ performance: Evidence from China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).

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    More about this item

    Keywords

    Africa; Egypt; firm performance; MENA Enterprise Surveys Political stability; treatment effects; World Bank Enterprise Surveys;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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