J&Apos;Accuse! Antisemitism and Financial Markets in the Time of the Dreyfus Affair

65 Pages Posted: 3 Jun 2020 Last revised: 14 Jul 2021

See all articles by Quoc-Anh Do

Quoc-Anh Do

Sciences Po - Department of Economics; Centre for Economic Policy Research (CEPR)

Roberto Galbiati

Department of Economics, Sciences Po-CNRS

Benjamin Marx

Sciences Po - Department of Economics

Miguel Ángel Ortiz Serrano

affiliation not provided to SSRN

Date Written: May 2020

Abstract

This paper studies discrimination in financial markets in the context of the "Dreyfus Affair" in 19th century France. We analyze the market performance of firms with Jewish board members. Building on empirical evidence and a model with antisemitic and unbiased agents, we show how investors betting on firms with Jewish connections earned higher returns during the media campaign organized to rehabilitate Dreyfus, the Jewish officer at the center of the Affair. Our paper provides novel evidence that discrimination can affect stock prices and create rents for some market participants. While these rents may attract betting against discriminators, the uncertainty surrounding discriminatory beliefs can limit the extent of arbitrage and allow discrimination to survive in the long run.

JEL Classification: G14, G41, J15, J71, N23

Suggested Citation

Do, Quoc-Anh and Galbiati, Roberto and Marx, Benjamin and Ortiz Serrano, Miguel Ángel, J&Apos;Accuse! Antisemitism and Financial Markets in the Time of the Dreyfus Affair (May 2020). CEPR Discussion Paper No. DP14826, Available at SSRN: https://ssrn.com/abstract=3615589

Quoc-Anh Do (Contact Author)

Sciences Po - Department of Economics ( email )

28 rue des Saints-Pères
Paris, 75007
France

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Roberto Galbiati

Department of Economics, Sciences Po-CNRS ( email )

28 rue des saints peres
Paris, 75007
France

Benjamin Marx

Sciences Po - Department of Economics ( email )

28, rue des Saints peres
Paris, 75007
France

Miguel Ángel Ortiz Serrano

affiliation not provided to SSRN

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