Abstract
Using an original firm-level dataset and utilizing the incidence of the Egyptian uprising of 2011, this paper provides an empirical investigation of the effects of firms’ political connections on employment growth in Egypt. We use the differences-in-differences (DiD) framework to compare employment growth in both politically connected firms (PCFs) and their unconnected counterparts before and after the Egyptian uprising. To minimize possible bias in the DiD estimation due to dealing with a heterogeneous group of firms, we apply the propensity score matching (PSM). We find that politically connected firms have decreased their job creation after the uprising.
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