Private banking and crony capitalism in Egypt
Joint Authors
Source
Economic Research Forum : Working Paper Series
Issue
Vol. 2016, Issue 979-1073 (31 Dec. 2016), pp.1-17, 17 p.
Publisher
Economic Research Forum for the Arab Countries Iran and Turkey
Publication Date
2016-12-31
Country of Publication
Egypt
No. of Pages
17
Main Subjects
Economics & Business Administration
Abstract EN
In Egypt, the bulk of bank loans during 2003-2010 went to politically connected firms.
At the same time, the banking sector was liberalized increasingly operated around competitive and profit-maximizing principles.
A key puzzle that the paper tries to answer is why private banks may lend in preferential ways to politically connected firms (PCFs) in such an environment.
Using a rich corporate dataset, we find that politically connected firms did not have higher profitability compared to non-politically connected firms.
This suggests that PCFs were perceived to have lower risk.
Indeed, we find evidence that this was the case, and that lower risk reflected higher access to bailout guarantees (implicit or explicit), as happened in earlier periods, and/or higher perceived growth opportunities
American Psychological Association (APA)
Diwan, Ishac& Schiffbauer, Marc. 2016. Private banking and crony capitalism in Egypt. Economic Research Forum : Working Paper Series،Vol. 2016, no. 979-1073, pp.1-17.
https://search.emarefa.net/detail/BIM-729540
Modern Language Association (MLA)
Diwan, Ishac& Schiffbauer, Marc. Private banking and crony capitalism in Egypt. Economic Research Forum : Working Paper Series No. 979-1073 (Dec. 2016), pp.1-17.
https://search.emarefa.net/detail/BIM-729540
American Medical Association (AMA)
Diwan, Ishac& Schiffbauer, Marc. Private banking and crony capitalism in Egypt. Economic Research Forum : Working Paper Series. 2016. Vol. 2016, no. 979-1073, pp.1-17.
https://search.emarefa.net/detail/BIM-729540
Data Type
Journal Articles
Language
English
Notes
Includes appendices : p. 16-17
Record ID
BIM-729540