Coalitions within the Egyptian Banking Sector: Catalysts of the Popular Revolution
Among the triggers of the Egyptian Revolution are the sentiments of resentment against the convoluted alliances between private businesses and policymakers that deprived the masses of their fair share of the high GDP growth. But does this indictment extend to the Egyptian banking sector? Based on a field survey and a dataset of 3218 business loans made by 33 banks during 1999-2010, this research differentiates between growth catalysts and crony coalitions within the Egyptian banking sector. The results of the Generalized Estimating Equations reveal that preferential lending to politically-connected businesses has a negative impact on employment and income distribution. Loans to small and medium enterprises and public firms help enhance income distribution and job generation, albeit that the soft-budget constraint on loans to public firms deters growth. The paper presents some policy recommendations that could help exorcise patrimonialism and clientelism and enhance growth alliances within the sector that controls most of the credit flow in the Egyptian economy. The study is not only of grave importance to the Egyptian nation whose members are actively engaged in refurbishing its institutional framework, but is of equal significance to other emerging economies that are keen to install equity, political stability and socioeconomic prosperity.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 14 (2012)
Issue (Month): 1 (April)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/bap|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mohieldin, Mahmoud & Nasr, Sahar, 2007. "On bank privatization: The case of Egypt," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(5), pages 707-725, February.
- Monal Abdel-Baki, 2013. "How can bank reforms assuage socioeconomic ordeals in emerging economies?: lessons for Egypt from the turkish experience," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(2), pages 37-59, July-Dece.
- Berger, Allen N. & Klapper, Leora F. & Martinez Peria, Maria Soledad & Zaidi, Rida, 2008.
"Bank ownership type and banking relationships,"
Journal of Financial Intermediation,
Elsevier, vol. 17(1), pages 37-62, January.
- Berger, Allen N. & Klapper, Leora F. & Martinez Peria, Maria Soledad & Zaidi, Rida, 2006. "Bank ownership type and banking relationships," Policy Research Working Paper Series 3862, The World Bank.
- Sebastian Edwards & Jeffrey A. Frankel, 2002. "Introduction to "Preventing Currency Crises in Emerging Markets"," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 1-20 National Bureau of Economic Research, Inc.
- Giannetti, Mariassunta, 2003. "Do Better Institutions Mitigate Agency Problems? Evidence from Corporate Finance Choices," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 185-212, March.
- Giannetti, M., 2000. "Do Better Institutions Mitigate Agency Problems? Evidence from Corporate Finance Choices," Papers 376, Banca Italia - Servizio di Studi.
- Mariassunta Giannetti, 2000. "Do Better Institutions Mitigate Agency Problems? Evidence from Corporate Finance Choices," Temi di discussione (Economic working papers) 376, Bank of Italy, Economic Research and International Relations Area.
- David Llewellyn, 2000. "Some Lessons for Regulation from Recent Bank Crises," Open Economies Review, Springer, vol. 11(1), pages 69-109, August.
- Edwards, Sebastian & Frankel, Jeffrey A. (ed.), 2002. "Preventing Currency Crises in Emerging Markets," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226184944.
- D.T. Llewellyn, 2000. "Some Lessons for Bank Regulation from Recent Crises," DNB Staff Reports (discontinued) 51, Netherlands Central Bank.
- David Fielding & Anja Shortland, 2005. "Political Violence and Excess Liquidity in Egypt," Journal of Development Studies, Taylor & Francis Journals, vol. 41(4), pages 542-557.
- Kane, Edward J., 2000. "Capital movements, banking insolvency, and silent runs in the Asian financial crisis," Pacific-Basin Finance Journal, Elsevier, vol. 8(2), pages 153-175, May.
- Edward J. Kane, 2000. "Capital Movements, Banking Insolvency, and Silent Runs in the Asian Financial Crisis," NBER Working Papers 7514, National Bureau of Economic Research, Inc.
- Matias Braun & Claudio Raddatz, 2008. "The Politics of Financial Development: Evidence from Trade Liberalization," Journal of Finance, American Finance Association, vol. 63(3), pages 1469-1508, 06.
- Raghuram G. Rajan & Luigi Zingales, 1998. "Which Capitalism? Lessons Form The East Asian Crisis," Journal of Applied Corporate Finance, Morgan Stanley, vol. 11(3), pages 40-48.
- Raghuram G. Rajan & Luigi Zingales, 1998. "Which Capitalism? Lessons from the East Asian Crisis," CRSP working papers 486, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Ratcliffe, Sarah J. & Shults, Justine, 2008. "GEEQBOX: A MATLAB Toolbox for Generalized Estimating Equations and Quasi-Least Squares," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 25(i14).
- Chang, Ha-Joon, 2000. "The Hazard of Moral Hazard: Untangling the Asian Crisis," World Development, Elsevier, vol. 28(4), pages 775-788, April.
- Brimmer, Andrew F., 1998. "Bank lending and the Asian economic crisis," The North American Journal of Economics and Finance, Elsevier, vol. 9(1), pages 105-119.
- Chong, Beng-Soon & Liu, Ming-Hua & Tan, Kok-Hui, 2006. "The wealth effect of forced bank mergers and cronyism," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3215-3233, November.
- Craig O. Brown & I. Serdar Dinç, 2005. "The Politics of Bank Failures: Evidence from Emerging Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1413-1444.
- Breuer, Janice Boucher, 2006. "Problem bank loans, conflicts of interest, and institutions," Journal of Financial Stability, Elsevier, vol. 2(3), pages 266-285, October.
- Abdel-Latif Abla & Schmitz Hubert, 2010. "Growth Alliances: Insights from Egypt," Business and Politics, De Gruyter, vol. 12(4), pages 1-29, December.
- Ibrahim L. Awad, 2008. "Towards measurement of political pressure on central banks: the case of the central bank of egypt," Prague Economic Papers, University of Economics, Prague, vol. 2008(3), pages 254-275.
- Pathan, Shams & Skully, Michael & Wickramanayake, J., 2008. "Reforms in Thai bank governance: The aftermath of the Asian financial crisis," International Review of Financial Analysis, Elsevier, vol. 17(2), pages 345-362.
- Pagano, Michael S., 2008. "Credit, cronyism, and control: Evidence from the Americas," Journal of International Money and Finance, Elsevier, vol. 27(3), pages 387-410, April.
- John D. Hey & Peter J. Lambert, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 567-573.
- Sebastian Edwards & Jeffrey A. Frankel, 2002. "Preventing Currency Crises in Emerging Markets," NBER Books, National Bureau of Economic Research, Inc, number edwa02-2. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:bpj:buspol:v:14:y:2012:i:1:n:5. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.