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Discrimination, managers and firm performance: evidence from "Aryanizations" in Nazi Germany

Huber, Kilian, Lindenthal, Volker and Waldinger, Fabian (2019) Discrimination, managers and firm performance: evidence from "Aryanizations" in Nazi Germany. CEP Discussion Papers (1599). Centre for Economic Performance, LSE, London, UK.

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Large-scale increases in discrimination can lead to dismissals of highly qualified business leaders who belong to targeted groups. We study how the forced removal of Jewish managers in Nazi Germany, caused by surging antisemitism, affected large _firms. The loss of Jewish managers led to large and persistent stock price reductions for affected firms. Dividend payments and returns on assets also declined. The effect of losing Jewish managers was distinct from other shocks that hit German firms after 1933, for example Nazi policies or firm-specific demand shocks. A back-of-the-envelope calculation suggests that the aggregate market valuation of firms listed in Berlin fell by 1.8 percent of German GNP because of the expulsion of Jewish managers. The findings imply that discrimination can lead to persistent and first-order economic losses.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2019 The Authors
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
D History General and Old World > DD Germany
H Social Sciences > HT Communities. Classes. Races
JEL classification: J - Labor and Demographic Economics > J7 - Labor Discrimination > J71 - Discrimination
M - Business Administration and Business Economics; Marketing; Accounting > M2 - Business Economics > M21 - Business Economics
N - Economic History > N8 - Micro-Business History > N84 - Europe: 1913-
Date Deposited: 25 Nov 2019 11:42
Last Modified: 15 Sep 2023 23:48

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