Diplomacy & Defense Think Tank News

This paper investigates the impact of aid for trade (AfT) targeted at trade policies on the participation of recipient countries in global value chains (GVCs), and how this impact varies with their prevailing political regimes. In democratic countries, the need for the authorities to account for the interests of various stakeholders (e.g., lobbies, trade unions) can compromise the allocation, use, and effectiveness of AfT. In contrast, less democratic regimes are typically more insulated from political pressures, which may lead to more effective outcomes of aid. At the same time, integration into some complex GVCs requires efficient and democratic institutions, to which these products are sensitive. Employing a sample of 110 countries and data covering 2002-2018, we control for standard determinants of GVC participation, while examining the effect of AfT and the moderating role of the political regime in place. Our estimation addresses the endogeneity of aid through an appropriate instrumentation strategy. Our results suggest that the effect of AfT is mostly positive in autocratic regimes, indicating more effective trade policy reforms. When we account for regional disparities, we find evidence that AfT for trade policy is also impactful in some democratic regimes. This might suggest that the efficacy of AfT is not strictly regime-dependent, but hinges on the government’s commitment to carry out significant reforms leading to greater participation in the global economy.

This paper investigates the impact of aid for trade (AfT) targeted at trade policies on the participation of recipient countries in global value chains (GVCs), and how this impact varies with their prevailing political regimes. In democratic countries, the need for the authorities to account for the interests of various stakeholders (e.g., lobbies, trade unions) can compromise the allocation, use, and effectiveness of AfT. In contrast, less democratic regimes are typically more insulated from political pressures, which may lead to more effective outcomes of aid. At the same time, integration into some complex GVCs requires efficient and democratic institutions, to which these products are sensitive. Employing a sample of 110 countries and data covering 2002-2018, we control for standard determinants of GVC participation, while examining the effect of AfT and the moderating role of the political regime in place. Our estimation addresses the endogeneity of aid through an appropriate instrumentation strategy. Our results suggest that the effect of AfT is mostly positive in autocratic regimes, indicating more effective trade policy reforms. When we account for regional disparities, we find evidence that AfT for trade policy is also impactful in some democratic regimes. This might suggest that the efficacy of AfT is not strictly regime-dependent, but hinges on the government’s commitment to carry out significant reforms leading to greater participation in the global economy.

This paper investigates the impact of aid for trade (AfT) targeted at trade policies on the participation of recipient countries in global value chains (GVCs), and how this impact varies with their prevailing political regimes. In democratic countries, the need for the authorities to account for the interests of various stakeholders (e.g., lobbies, trade unions) can compromise the allocation, use, and effectiveness of AfT. In contrast, less democratic regimes are typically more insulated from political pressures, which may lead to more effective outcomes of aid. At the same time, integration into some complex GVCs requires efficient and democratic institutions, to which these products are sensitive. Employing a sample of 110 countries and data covering 2002-2018, we control for standard determinants of GVC participation, while examining the effect of AfT and the moderating role of the political regime in place. Our estimation addresses the endogeneity of aid through an appropriate instrumentation strategy. Our results suggest that the effect of AfT is mostly positive in autocratic regimes, indicating more effective trade policy reforms. When we account for regional disparities, we find evidence that AfT for trade policy is also impactful in some democratic regimes. This might suggest that the efficacy of AfT is not strictly regime-dependent, but hinges on the government’s commitment to carry out significant reforms leading to greater participation in the global economy.

Many colonies in Africa attained independence through negotiated settlements. However, several others engaged in armed liberation struggles, for example, Kenya, Namibia, South Africa, Southern Rhodesia (Zimbabwe), and the Portuguese colonies of Angola, Cape Verde, Guinea Bissau, Mozambique, and São Tomé and Príncipe. Newly independent states provided liberation movements with bases on their territories and political, military, intellectual, ideological, material, and moral support. In West Africa, Ghana’s first president, Kwame Nkrumah, a notable pan-Africanist, declared in his Independence Day speech in 1957, “Our independence is meaningless unless it is linked up with the total liberation of the African continent.” In East Africa, Julius Nyerere and Jomo Kenyatta, the first presidents of independent Tanzania and Kenya respectively, showed similar commitment to Pan-Africanism and anticolonialism by hosting refugees fleeing armed struggles in Southern Africa. Tanzania hosted the Organization of African Unity Liberation Committee supported anticolonial resistance and liberation movements. President Nyerere supported them for “challenging injustices of empire and apartheid” and declared, “I train freedom fighters”. He encouraged Tanzanians living around liberation movement camps to welcome these movements and their freedom fighters and also protect them from agents of colonial governments. Support also came from many other countries on the continent including Nigeria, Ethiopia, and Algeria. The latter provided sanctuary to representatives of liberation movements such as Nelson Mandela of the African National Congress (ANC) in South Africa.

Many colonies in Africa attained independence through negotiated settlements. However, several others engaged in armed liberation struggles, for example, Kenya, Namibia, South Africa, Southern Rhodesia (Zimbabwe), and the Portuguese colonies of Angola, Cape Verde, Guinea Bissau, Mozambique, and São Tomé and Príncipe. Newly independent states provided liberation movements with bases on their territories and political, military, intellectual, ideological, material, and moral support. In West Africa, Ghana’s first president, Kwame Nkrumah, a notable pan-Africanist, declared in his Independence Day speech in 1957, “Our independence is meaningless unless it is linked up with the total liberation of the African continent.” In East Africa, Julius Nyerere and Jomo Kenyatta, the first presidents of independent Tanzania and Kenya respectively, showed similar commitment to Pan-Africanism and anticolonialism by hosting refugees fleeing armed struggles in Southern Africa. Tanzania hosted the Organization of African Unity Liberation Committee supported anticolonial resistance and liberation movements. President Nyerere supported them for “challenging injustices of empire and apartheid” and declared, “I train freedom fighters”. He encouraged Tanzanians living around liberation movement camps to welcome these movements and their freedom fighters and also protect them from agents of colonial governments. Support also came from many other countries on the continent including Nigeria, Ethiopia, and Algeria. The latter provided sanctuary to representatives of liberation movements such as Nelson Mandela of the African National Congress (ANC) in South Africa.

Many colonies in Africa attained independence through negotiated settlements. However, several others engaged in armed liberation struggles, for example, Kenya, Namibia, South Africa, Southern Rhodesia (Zimbabwe), and the Portuguese colonies of Angola, Cape Verde, Guinea Bissau, Mozambique, and São Tomé and Príncipe. Newly independent states provided liberation movements with bases on their territories and political, military, intellectual, ideological, material, and moral support. In West Africa, Ghana’s first president, Kwame Nkrumah, a notable pan-Africanist, declared in his Independence Day speech in 1957, “Our independence is meaningless unless it is linked up with the total liberation of the African continent.” In East Africa, Julius Nyerere and Jomo Kenyatta, the first presidents of independent Tanzania and Kenya respectively, showed similar commitment to Pan-Africanism and anticolonialism by hosting refugees fleeing armed struggles in Southern Africa. Tanzania hosted the Organization of African Unity Liberation Committee supported anticolonial resistance and liberation movements. President Nyerere supported them for “challenging injustices of empire and apartheid” and declared, “I train freedom fighters”. He encouraged Tanzanians living around liberation movement camps to welcome these movements and their freedom fighters and also protect them from agents of colonial governments. Support also came from many other countries on the continent including Nigeria, Ethiopia, and Algeria. The latter provided sanctuary to representatives of liberation movements such as Nelson Mandela of the African National Congress (ANC) in South Africa.

The Hamburg Sustainability Conference (HSC) 2026 convened around 1,600 participants from 112 countries at a moment of profound disruption and redistribution of power. The HSC confirmed sustainability as the organizing framework linking peace and stability, economic
resilience and competitiveness, planetary boundaries and international cooperation. The rules-based international order is under pressure, fiscal space is shrinking and conflicts are multiplying, while climate change, biodiversity loss and resource depletion are compounding
these pressures on economies and societies already stretched thin. Yet the world has never possessed greater technological capabilities, financial wealth and scientific knowledge. What matters now is how we use these resources to deliver shared prosperity and resilience.
The discussions at HSC 2026 can be summarized along three narrative arcs. The first asks why cooperation remains essential in a more multipolar world. Legitimacy depends on changing the terms of North–South relations, broadening representation and building a cooperative multipolar order in which a wider group of actors can shape and defend common rules. The launch of the South–North Commission on Development offers a structured process for rethinking international cooperation toward fairer partnerships and a  sustainability Agenda beyond 2030. The second narrative arc examines what needs to change. Sustainability transformation pays
off economically, but only where investment can flow, risks are shared and governance is predictable. Nature and human capital are systematically undervalued. The bottleneck is the institutional and financing structures needed to unlock them at scale. The third narrative arc addresses how cooperation can deliver. It shows that partnerships accelerate sustainable development when they move from one-off initiatives to systems that mobilize finance, create markets and build local capabilities. Scaling Capital for Sustainable Development (SCALED), Innovative Capital Mobilization in Africa (ICAMA), critical-mineral and hydrogen partnerships, and urban examples from Mombasa and eThekwini show how tangible forms of cooperation can turn commitments into sustainable investment, deeper value chains and locally owned action. This shift is especially visible in Africa, where partnerships are increasingly framed around opportunity, value creation and agency. The road ahead runs through the Triple COP+ year, the G20 under UK chairmanship, and the SDG Summit in September 2027. HSC 2026 demonstrated that navigating the new - disruptive - normal is possible. The task now is to prove it at scale. […]

The Hamburg Sustainability Conference (HSC) 2026 convened around 1,600 participants from 112 countries at a moment of profound disruption and redistribution of power. The HSC confirmed sustainability as the organizing framework linking peace and stability, economic
resilience and competitiveness, planetary boundaries and international cooperation. The rules-based international order is under pressure, fiscal space is shrinking and conflicts are multiplying, while climate change, biodiversity loss and resource depletion are compounding
these pressures on economies and societies already stretched thin. Yet the world has never possessed greater technological capabilities, financial wealth and scientific knowledge. What matters now is how we use these resources to deliver shared prosperity and resilience.
The discussions at HSC 2026 can be summarized along three narrative arcs. The first asks why cooperation remains essential in a more multipolar world. Legitimacy depends on changing the terms of North–South relations, broadening representation and building a cooperative multipolar order in which a wider group of actors can shape and defend common rules. The launch of the South–North Commission on Development offers a structured process for rethinking international cooperation toward fairer partnerships and a  sustainability Agenda beyond 2030. The second narrative arc examines what needs to change. Sustainability transformation pays
off economically, but only where investment can flow, risks are shared and governance is predictable. Nature and human capital are systematically undervalued. The bottleneck is the institutional and financing structures needed to unlock them at scale. The third narrative arc addresses how cooperation can deliver. It shows that partnerships accelerate sustainable development when they move from one-off initiatives to systems that mobilize finance, create markets and build local capabilities. Scaling Capital for Sustainable Development (SCALED), Innovative Capital Mobilization in Africa (ICAMA), critical-mineral and hydrogen partnerships, and urban examples from Mombasa and eThekwini show how tangible forms of cooperation can turn commitments into sustainable investment, deeper value chains and locally owned action. This shift is especially visible in Africa, where partnerships are increasingly framed around opportunity, value creation and agency. The road ahead runs through the Triple COP+ year, the G20 under UK chairmanship, and the SDG Summit in September 2027. HSC 2026 demonstrated that navigating the new - disruptive - normal is possible. The task now is to prove it at scale. […]

The Hamburg Sustainability Conference (HSC) 2026 convened around 1,600 participants from 112 countries at a moment of profound disruption and redistribution of power. The HSC confirmed sustainability as the organizing framework linking peace and stability, economic
resilience and competitiveness, planetary boundaries and international cooperation. The rules-based international order is under pressure, fiscal space is shrinking and conflicts are multiplying, while climate change, biodiversity loss and resource depletion are compounding
these pressures on economies and societies already stretched thin. Yet the world has never possessed greater technological capabilities, financial wealth and scientific knowledge. What matters now is how we use these resources to deliver shared prosperity and resilience.
The discussions at HSC 2026 can be summarized along three narrative arcs. The first asks why cooperation remains essential in a more multipolar world. Legitimacy depends on changing the terms of North–South relations, broadening representation and building a cooperative multipolar order in which a wider group of actors can shape and defend common rules. The launch of the South–North Commission on Development offers a structured process for rethinking international cooperation toward fairer partnerships and a  sustainability Agenda beyond 2030. The second narrative arc examines what needs to change. Sustainability transformation pays
off economically, but only where investment can flow, risks are shared and governance is predictable. Nature and human capital are systematically undervalued. The bottleneck is the institutional and financing structures needed to unlock them at scale. The third narrative arc addresses how cooperation can deliver. It shows that partnerships accelerate sustainable development when they move from one-off initiatives to systems that mobilize finance, create markets and build local capabilities. Scaling Capital for Sustainable Development (SCALED), Innovative Capital Mobilization in Africa (ICAMA), critical-mineral and hydrogen partnerships, and urban examples from Mombasa and eThekwini show how tangible forms of cooperation can turn commitments into sustainable investment, deeper value chains and locally owned action. This shift is especially visible in Africa, where partnerships are increasingly framed around opportunity, value creation and agency. The road ahead runs through the Triple COP+ year, the G20 under UK chairmanship, and the SDG Summit in September 2027. HSC 2026 demonstrated that navigating the new - disruptive - normal is possible. The task now is to prove it at scale. […]

Climate-induced planned relocation is becoming an unavoidable policy issue for some highly exposed communities. Although relocation should remain a last resort after other realistic options for adaptation in place have been assessed, ensuring that the money is available when needed to support relocation is critical. The challenge is that funding is insufficient, drawn from diverse sources and often arrives too late and in fragmented forms: for example, one project for housing, another for infrastructure, and little predictable support for consultation, land negotiations, safeguards, livelihoods, host communities or long-term maintenance. The financing problem is therefore not only the scale of the costs, but the difficulty of organising money over time and across institutions and safeguards. This can leave governments reacting after crises rather than planning before risks become unmanageable.
Sovereign trust funds offer one practical way to address this gap. They do not create finance by themselves, but they can provide a country-owned platform for receiving, sequencing and reporting domestic revenue, bilateral support, multilateral development bank (MDB) finance, climate funds, disaster risk finance, and loss and damage resources. They present an alternative to predominantly loan- and grant-based financing for planned relocation. Fiji’s Climate Relocation of
Communities Trust Fund shows both the promise and limits of this approach: It provides a legal and institutional basis for relocation finance within government and links international funding to procedures, but it still requires capitalisation, administrative capacity and long-term technical support. The model presents an opportunity to support sovereign, rights-based financing systems rather than relying solely on donor-funded, often piecemeal relocation projects. It can also make funding available at the appropriate time and without undue time pressure.
Key policy messages:
• Finance planned relocation before a crisis, especially assessment, consent, land, safeguards and project preparation.
• Treat relocation as a long-term investment in the collective good, rather than solely as a construction or emergency response measure.
• Support sovereign trust funds where they are legally mandated at the national level, budget-linked, transparent and capitalised.
• Use finance to uphold quality and rights, including community-led processes, support for host communities and support for long-term livelihoods.

Climate-induced planned relocation is becoming an unavoidable policy issue for some highly exposed communities. Although relocation should remain a last resort after other realistic options for adaptation in place have been assessed, ensuring that the money is available when needed to support relocation is critical. The challenge is that funding is insufficient, drawn from diverse sources and often arrives too late and in fragmented forms: for example, one project for housing, another for infrastructure, and little predictable support for consultation, land negotiations, safeguards, livelihoods, host communities or long-term maintenance. The financing problem is therefore not only the scale of the costs, but the difficulty of organising money over time and across institutions and safeguards. This can leave governments reacting after crises rather than planning before risks become unmanageable.
Sovereign trust funds offer one practical way to address this gap. They do not create finance by themselves, but they can provide a country-owned platform for receiving, sequencing and reporting domestic revenue, bilateral support, multilateral development bank (MDB) finance, climate funds, disaster risk finance, and loss and damage resources. They present an alternative to predominantly loan- and grant-based financing for planned relocation. Fiji’s Climate Relocation of
Communities Trust Fund shows both the promise and limits of this approach: It provides a legal and institutional basis for relocation finance within government and links international funding to procedures, but it still requires capitalisation, administrative capacity and long-term technical support. The model presents an opportunity to support sovereign, rights-based financing systems rather than relying solely on donor-funded, often piecemeal relocation projects. It can also make funding available at the appropriate time and without undue time pressure.
Key policy messages:
• Finance planned relocation before a crisis, especially assessment, consent, land, safeguards and project preparation.
• Treat relocation as a long-term investment in the collective good, rather than solely as a construction or emergency response measure.
• Support sovereign trust funds where they are legally mandated at the national level, budget-linked, transparent and capitalised.
• Use finance to uphold quality and rights, including community-led processes, support for host communities and support for long-term livelihoods.

Climate-induced planned relocation is becoming an unavoidable policy issue for some highly exposed communities. Although relocation should remain a last resort after other realistic options for adaptation in place have been assessed, ensuring that the money is available when needed to support relocation is critical. The challenge is that funding is insufficient, drawn from diverse sources and often arrives too late and in fragmented forms: for example, one project for housing, another for infrastructure, and little predictable support for consultation, land negotiations, safeguards, livelihoods, host communities or long-term maintenance. The financing problem is therefore not only the scale of the costs, but the difficulty of organising money over time and across institutions and safeguards. This can leave governments reacting after crises rather than planning before risks become unmanageable.
Sovereign trust funds offer one practical way to address this gap. They do not create finance by themselves, but they can provide a country-owned platform for receiving, sequencing and reporting domestic revenue, bilateral support, multilateral development bank (MDB) finance, climate funds, disaster risk finance, and loss and damage resources. They present an alternative to predominantly loan- and grant-based financing for planned relocation. Fiji’s Climate Relocation of
Communities Trust Fund shows both the promise and limits of this approach: It provides a legal and institutional basis for relocation finance within government and links international funding to procedures, but it still requires capitalisation, administrative capacity and long-term technical support. The model presents an opportunity to support sovereign, rights-based financing systems rather than relying solely on donor-funded, often piecemeal relocation projects. It can also make funding available at the appropriate time and without undue time pressure.
Key policy messages:
• Finance planned relocation before a crisis, especially assessment, consent, land, safeguards and project preparation.
• Treat relocation as a long-term investment in the collective good, rather than solely as a construction or emergency response measure.
• Support sovereign trust funds where they are legally mandated at the national level, budget-linked, transparent and capitalised.
• Use finance to uphold quality and rights, including community-led processes, support for host communities and support for long-term livelihoods.

This paper examines how leadership gender configurations shape digitalisation and innovation in Egyptian manufacturing. Using the 2020/21 Egyptian Industrial Firm Behavior Survey (EIFBS) covering 2,338 firms, we construct a four-category gender variable (female owners and male managers (FOMM), male owners and female managers (MOFM), female owners and female managers (FOFM) and all-male baseline) and analyse how these owner–manager gender mixes relate to the adoption of digital technologies (DT) and to innovation outputs, and how these relationships vary by firm size and DT use. Our analysis suggests that firms with male owners and female managers (MOFM) are most likely to adopt DT across specifications. The cross-sectional data suggests that mixed-gender firms are associated with a higher probability of spending on R&D, but not with higher innovation outputs in firms with female owners (i.e. FOMM and FOFM) – pointing toward an innovation conversion gap in those firms. Heterogeneity results show that the MOFM adoption premium of DT and a negative association between FOMM and innovation are strongest in small firms. DT use moderates gender gaps: female-owned firms not using DT are significantly less likely than all-male firms to generate innovation outputs, but this penalty disappears when female-owned firms use DT. A combined size–sector analysis suggests that the divergence between MOFM and FOMM/FOFM is driven mainly by small food manufacturers, with average marginal effects elsewhere broadly comparable. The results highlight leadership composition as a correlate of technology adoption and the role of DT in converting innovation inputs into outputs.

This paper examines how leadership gender configurations shape digitalisation and innovation in Egyptian manufacturing. Using the 2020/21 Egyptian Industrial Firm Behavior Survey (EIFBS) covering 2,338 firms, we construct a four-category gender variable (female owners and male managers (FOMM), male owners and female managers (MOFM), female owners and female managers (FOFM) and all-male baseline) and analyse how these owner–manager gender mixes relate to the adoption of digital technologies (DT) and to innovation outputs, and how these relationships vary by firm size and DT use. Our analysis suggests that firms with male owners and female managers (MOFM) are most likely to adopt DT across specifications. The cross-sectional data suggests that mixed-gender firms are associated with a higher probability of spending on R&D, but not with higher innovation outputs in firms with female owners (i.e. FOMM and FOFM) – pointing toward an innovation conversion gap in those firms. Heterogeneity results show that the MOFM adoption premium of DT and a negative association between FOMM and innovation are strongest in small firms. DT use moderates gender gaps: female-owned firms not using DT are significantly less likely than all-male firms to generate innovation outputs, but this penalty disappears when female-owned firms use DT. A combined size–sector analysis suggests that the divergence between MOFM and FOMM/FOFM is driven mainly by small food manufacturers, with average marginal effects elsewhere broadly comparable. The results highlight leadership composition as a correlate of technology adoption and the role of DT in converting innovation inputs into outputs.

This paper examines how leadership gender configurations shape digitalisation and innovation in Egyptian manufacturing. Using the 2020/21 Egyptian Industrial Firm Behavior Survey (EIFBS) covering 2,338 firms, we construct a four-category gender variable (female owners and male managers (FOMM), male owners and female managers (MOFM), female owners and female managers (FOFM) and all-male baseline) and analyse how these owner–manager gender mixes relate to the adoption of digital technologies (DT) and to innovation outputs, and how these relationships vary by firm size and DT use. Our analysis suggests that firms with male owners and female managers (MOFM) are most likely to adopt DT across specifications. The cross-sectional data suggests that mixed-gender firms are associated with a higher probability of spending on R&D, but not with higher innovation outputs in firms with female owners (i.e. FOMM and FOFM) – pointing toward an innovation conversion gap in those firms. Heterogeneity results show that the MOFM adoption premium of DT and a negative association between FOMM and innovation are strongest in small firms. DT use moderates gender gaps: female-owned firms not using DT are significantly less likely than all-male firms to generate innovation outputs, but this penalty disappears when female-owned firms use DT. A combined size–sector analysis suggests that the divergence between MOFM and FOMM/FOFM is driven mainly by small food manufacturers, with average marginal effects elsewhere broadly comparable. The results highlight leadership composition as a correlate of technology adoption and the role of DT in converting innovation inputs into outputs.

This paper investigates the determinants and dynamics of labour demand and specifically informal labour in Egypt’s manufacturing sector, using nationally representative firm-level data from the 2020/21 Egyptian Industrial Firm Behavior Survey. Applying ordinary least squares and fractional logit models, we analyse total employment, the share of informal labour, and its average annual change over the firm life cycle. Three key findings emerge. First, employment is positively associated with capital, exporting, technology adoption, innovation, industrial zones, worker training, and managerial education, and negatively associated with sole proprietorships, wages, and total factor productivity. Second, informal employment is more common among private sector firms, sole proprietorships, and firms using more part-time workers, and less prevalent among firms adopting technology or led by more educated managers. Third, changes in informality over time are modest: most formal firms exhibit no change in the share of informal workers. Notably, formal firms that did not initially employ informal labour tend to increase their informal share, while firms that formalised continue to rely heavily on informal employment. Together, these findings underscore the persistence of informality and limited transitions towards full formalisation within Egypt’s formal manufacturing sector.

This paper investigates the determinants and dynamics of labour demand and specifically informal labour in Egypt’s manufacturing sector, using nationally representative firm-level data from the 2020/21 Egyptian Industrial Firm Behavior Survey. Applying ordinary least squares and fractional logit models, we analyse total employment, the share of informal labour, and its average annual change over the firm life cycle. Three key findings emerge. First, employment is positively associated with capital, exporting, technology adoption, innovation, industrial zones, worker training, and managerial education, and negatively associated with sole proprietorships, wages, and total factor productivity. Second, informal employment is more common among private sector firms, sole proprietorships, and firms using more part-time workers, and less prevalent among firms adopting technology or led by more educated managers. Third, changes in informality over time are modest: most formal firms exhibit no change in the share of informal workers. Notably, formal firms that did not initially employ informal labour tend to increase their informal share, while firms that formalised continue to rely heavily on informal employment. Together, these findings underscore the persistence of informality and limited transitions towards full formalisation within Egypt’s formal manufacturing sector.

This paper investigates the determinants and dynamics of labour demand and specifically informal labour in Egypt’s manufacturing sector, using nationally representative firm-level data from the 2020/21 Egyptian Industrial Firm Behavior Survey. Applying ordinary least squares and fractional logit models, we analyse total employment, the share of informal labour, and its average annual change over the firm life cycle. Three key findings emerge. First, employment is positively associated with capital, exporting, technology adoption, innovation, industrial zones, worker training, and managerial education, and negatively associated with sole proprietorships, wages, and total factor productivity. Second, informal employment is more common among private sector firms, sole proprietorships, and firms using more part-time workers, and less prevalent among firms adopting technology or led by more educated managers. Third, changes in informality over time are modest: most formal firms exhibit no change in the share of informal workers. Notably, formal firms that did not initially employ informal labour tend to increase their informal share, while firms that formalised continue to rely heavily on informal employment. Together, these findings underscore the persistence of informality and limited transitions towards full formalisation within Egypt’s formal manufacturing sector.