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

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  • Daron Acemoglu
  • Tarek A. Hassan
  • Ahmed Tahoun

Abstract

Unprecedented street protests brought down Mubarak’s government and ushered in an era of competition between three rival political groups in Egypt. Using daily variation in the number of protesters, we document that more intense protests 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 rival groups. These results suggest that street protests serve as a partial check on political rent-seeking. General discontent expressed on Twitter predicts protests but has no direct effect on valuations. Received February 12, 2016; editorial decision April 5, 2017 by Editor Andrew Karolyi.

Suggested Citation

  • Daron Acemoglu & Tarek A. Hassan & Ahmed Tahoun, 2018. "The Power of the Street: Evidence from Egypt’s Arab Spring," Review of Financial Studies, Society for Financial Studies, vol. 31(1), pages 1-42.
  • Handle: RePEc:oup:rfinst:v:31:y:2018:i:1:p:1-42.
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    Cited by:

    1. Rougier, Eric, 2016. "“Fire in Cairo”: Authoritarian–Redistributive Social Contracts, Structural Change, and the Arab Spring," World Development, Elsevier, vol. 78(C), pages 148-171.
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    3. Marco Manacorda & Andrea Tesei, 2016. "Liberation Technology: Mobile Phones and Political Mobilization in Africa," HiCN Working Papers 217, Households in Conflict Network.
    4. Petrova, Maria & Sen, Ananya & Yildirim, Pinar, 2017. "Social Media and Political Donations: New Technology and Incumbency Advantage in the United States," CEPR Discussion Papers 11808, C.E.P.R. Discussion Papers.
    5. El-Mallakh, Nelly & Maurel, Mathilde & Speciale, Biagio, 2018. "Arab spring protests and women's labor market outcomes: Evidence from the Egyptian revolution," Journal of Comparative Economics, Elsevier, vol. 46(2), pages 656-682.
    6. Hendel, Igal E & Lach, Saul & Spiegel, Yossi, 2015. "Consumers' Activism: the Facebook boycott of Cottage Cheese," CEPR Discussion Papers 10460, C.E.P.R. Discussion Papers.
    7. Diwan, Ishac & Jamal Ibrahim Haidar, "undated". "Do Political Connections Reduce Job Creation? Evidence from Lebanon," Working Paper 414186, Harvard University OpenScholar.
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    17. Zhu, Haikun, 2018. "Essays on political economy of finance and fintech," Other publications TiSEM 93f94423-e671-4041-bb24-8, Tilburg University, School of Economics and Management.
    18. Diffo Lambo, Lawrence & Pongou, Roland & Tchantcho, Bertrand & Wambo, Pierre, 2015. "Networked politics: political cycles and instability under social influences," MPRA Paper 65641, University Library of Munich, Germany.
    19. repec:eee:poleco:v:53:y:2018:i:c:p:13-58 is not listed on IDEAS
    20. Davide Cantoni & David Y. Yang & Noam Yuchtman & Y. Jane Zhang, 2017. "Are Protests Games of Strategic Complements or Substitutes? Experimental Evidence from Hong Kong's Democracy Movement," NBER Working Papers 23110, National Bureau of Economic Research, Inc.
    21. repec:eee:jcecon:v:47:y:2019:i:1:p:50-64 is not listed on IDEAS
    22. Diffo Lambo, Lawrence & Pongou, Roland & Tchantcho, Bertrand & Wambo, Pierre, 2015. "Networked Politics: Political Cycles and Instability under Social Influences," MPRA Paper 65598, University Library of Munich, Germany.
    23. repec:eee:reveco:v:56:y:2018:i:c:p:238-257 is not listed on IDEAS

    More about this item

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G3 - Financial Economics - - Corporate Finance and Governance
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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