regulations.<sup>26</sup> The evidence in this section demonstrates that firms in sectors with a higher intensity of political connections are more likely to have obtained land from the government or to have received it for free; to have obtained a bank loan; or to be located in an industrial zone.<sup>27</sup> We do not have information for our sample of connected and unconnected firms about their firm-level experience with these variables. However, we are able to use well-known data from the World Bank Enterprise Survey (WBES) to build detailed 4-digit industry-level information on these. We can then ask whether WBES respondents from sectors with at least one connected firm are more likely to report that they received these benefits. We cannot be sure that those firms that report having received benefits are politically connected – WBES respondents are anonymous – but the fact that they are from sectors with more politically connected firms makes this more likely.<sup>28</sup> The WBES data contain firm level information for each of these three variables. The first concerns an overtly government decision, whether the firm acquired land from the government: “Does your establishment own or lease the majority of its land? From whom have you gotten the land (people, government, for free, other)?” Industrial zones in Egypt are sponsored by the government and generally include subsidized infrastructure. Access to industrial parks is typically also a government decision. WBES asks about industrial parks, “Is the firm located in an industrial zone?” We also analyze responses to the WBES question, “Does your establishment currently have a loan from a financial institution?” Political connections affect access to credit in two ways. State-owned institutions are still important sources of private sector credit, so credit could have been a government decision that the politically connected could directly influence. In addition, the politically connected are likely to have a large advantage in securing private credit, if they enjoy implicit government guarantees.

As usual, we classify WBES firms according to their 4-digit industrial classification and aggregate firm reports of access to land, credit or location in an industrial park at the 4-digit sector level. Then, as in the analysis of NTMs and energy subsidies, we ask whether sectors with more politically connected firms have better access.

The WBES data include data from 3,040 firms in 91 4-digit (ISIC Rev. 3.1) manufacturing sectors.<sup>29</sup> Out of 3,036 manufacturing firms, 1,431 reported acquiring land: 933 obtained the land 26 Industrial zones in Egypt include QIZs which guarantee firms duty and quota free exports to the U.S. Abdel-Latif and Nugent (2010) review the impact of QIZs in Egypt and find that large firms disproportionally benefit from the QIZ agreement: in the 17 industrial zones hosting QIZ factories 88 percent of exports are concentrated in firms with more than 500 workers. Textiles and garments account for 89 percent of QIZ exports, followed by plastics and chemicals.

27 Reportedly, the type of activities benefitting from tax exemptions in special economic zones was also demand driven; for instance, the list of sectors eligible for tax exemptions was expanded to include media companies after the construction of a new media complex (including the media company, hotels, theatres, etc.) by a politically connected businessman. The complex was declared a special economic zone shortly after, allowing him to benefit from tax exemptions (Ahram Online, various issues).

28 Moreover, while the WBES is a survey, it covers most large firms within a sector, which typically includes the connected firms in sectors where these firms are present.

29 Among the 91 manufacturing sectors, 59 have no politically connected CEOs, while 32 have at least one politically connected CEO; 26 have no politically connected owners, while the remaining 65 sectors have between one (18 sectors) and 35 (one sector) politically connected owners; and 19 have no politically connected firms of any kind, while the remaining 72 sectors exhibit between one (16 sectors) and 35 (two sectors) connected firms. In sectors with multiple 18