Stock Market Performance of Jewish Firms During the Third Reich
51 Pages Posted: 11 Dec 2019
Date Written: December 9, 2019
We study the effect of discrimination against Jewish managers and owners on their firms' stock during the Third Reich. The stock of firms with Jewish managers underperformed by around 5% annually, with abnormal performance persisting on average for three years until firm "Aryanization." Firms with Jewish owners perform much like firms without any Jewish involvement. We identify harassment of Jewish-managed firms as the leading cause for the discount. Alternative explanations, such as brain drain and Jewish stigma, seem less relevant. We find that discriminating against a minority can have a negative effect on an entire economy.
Keywords: Third Reich, Hitler, Jewish Firms, Discrimination, Aryanization, Abnormal Performance
JEL Classification: G12, G14, N24
Suggested Citation: Suggested Citation