The Egyptian Economic Census 2022/2023 wave, accessed by the OECD, represents almost four million establishments in Egypt. More than 67% of them belong to non-financial market services (G‑N excluding K) (of which 66% belongs to the Wholesale and retail trade sector [G]), while 13.5% operate in Manufacturing (C). In terms of value added, manufacturing represents 27% of value added of the total economy, while non-financial market services around 32%. The sector Mining and quarrying (B) represents only 0.05% of establishments but more than 12% of total value added in the country.
Missing variables are almost absent in the data, including negative value added firms that represent just a few observations in the sample. This means that, for almost the totality of the sample, the code can calculate labour productivity. The same is true for multifactor productivity (MFP), as information on fixed assets and intermediates is available across the whole sample.
The analysis of this chapter focuses on the manufacturing sector and, when possible, compares results with the performance of non-financial market services.1 To ease comparability with OECD countries, Agriculture, non-market services (P-S), Electricity, water and gas (D-E) and Mining and quarrying (B) are excluded, as those sectors are not well represented for most OECD countries included in the MultiProd project. Additionally, as Transportation (H) is not well covered in the economic census due to high presence of establishments outside fixed location, the analysis further excludes this sector; Real estate (L) and Manufacture of coke, and refined petroleum products (CD) are also excluded as usually present outlier values in most countries.
As discussed, the establishment is the unit of analysis in the Egyptian census, while for OECD countries, MultiProd relies on firm-level data. However, the majority of establishments (98%) in Egypt are single branches, thus limiting concerns about comparability with OECD countries over most of the productivity and size distribution. Yet, the 2% of multibranch firms are more productive and larger than the single branch firms, thus leading to an overestimation of the productivity of smaller size classes with regard to their OECD counterparts and an underestimation of the contribution of this 2% of businesses to output, productivity and employment. Henceforth the terminology “firm” will be used in both cases, denoting establishments in Egypt and enterprises in OECD countries.
Some OECD countries rely on “persons engaged” as measure of labour input, while others on employees. Additionally, most of the OECD countries included in the benchmark has a sampling threshold of one employee in the data. To improve the accuracy of the analysis and ease comparability with the OECD, Egyptian firms with no more than one person engaged have been excluded.2 That said, the analysis has been replicated in its entirety, including all businesses and firms with one person engaged, and results remain virtually unchanged. It is worth noticing that even when excluding one-person-engaged firms, the distribution of firms in Egypt is still more skewed towards micro firms relative to the OECD benchmark.
OECD countries included in the analysis are Belgium, Canada, Croatia, Estonia, Finland, France, Hungary, Italy, Lithuania, Portugal, Slovenia and Spain.3 To ensure comparability with Egypt, the analysis uses data for 2022, except for Croatia and Italy where the latest available year is 2019, and for Estonia where it is 2021.