The Power of the Street: Evidence from Egypt's Arab Spring

Daron Acemoglu, Tarek Hassan and Ahmed Tahoun

No 20665, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: During Egypt's Arab Spring, unprecedented popular mobilization and protests brought down Hosni Mubarak's government and ushered in an era of competition between three groups: elites associated with Mubarak's National Democratic Party (NDP), the military, and the Islamist Muslim Brotherhood. Street protests continued to play an important role during this power struggle. We show that these protests are associated with differential stock market returns for firms connected to the three groups. Using daily variation in the number of protesters, we document that more intense protests in Tahrir Square are associated with lower stock market valuations for firms connected to the group currently in power relative to non-connected firms, but have no impact on the relative valuations of firms connected to other powerful groups. We further show that activity on social media may have played an important role in mobilizing protesters, but had no direct effect on relative valuations. According to our preferred interpretation, these events provide evidence that, under weak institutions, popular mobilization and protests have a role in restricting the ability of connected firms to capture excess rents.

JEL-codes: E02 G12 G3 O11 O43 O53 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-ara and nep-pol
Note: AP CF DAE DEV EFG POL
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Citations: View citations in EconPapers (34)

Published as Daron Acemoglu & Tarek A. Hassan & Ahmed Tahoun, 2018. "The Power of the Street: Evidence from Egypt’s Arab Spring," The Review of Financial Studies, vol 31(1), pages 1-42.

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Journal Article: The Power of the Street: Evidence from Egypt’s Arab Spring (2018)
Working Paper: The Power of the Street: Evidence from Egypt's Arab Spring (2014)
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