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Discrimination, Managers, and Firm Performance: Evidence from “Aryanizations†in Nazi Germany

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  • Waldinger, Fabian
  • Huber, Kilian
  • Lindenthal, Volker

Abstract

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporations. Firms that lost Jewish managers experienced persistent reductions in stock prices, dividends, and returns on assets. Aggregate market value fell by roughly 1.8 percent of German GNP because of the expulsions. Managers who served as key connectors to other firms and managers who were highly educated were particularly important for firm performance. The findings imply that individual managers drive firm performance. Discrimination against qualified business leaders causes first-order economic losses.

Suggested Citation

  • Waldinger, Fabian & Huber, Kilian & Lindenthal, Volker, 2018. "Discrimination, Managers, and Firm Performance: Evidence from “Aryanizations†in Nazi Germany," CEPR Discussion Papers 13089, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13089
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    Cited by:

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    3. Becker, Sascha O. & Ferrara, Andreas, 2019. "Consequences of forced migration: A survey of recent findings," Labour Economics, Elsevier, vol. 59(C), pages 1-16.
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    5. Kristian S. Blickle, 2020. "Pandemics Change Cities: Municipal Spending and Voter Extremism in Germany, 1918-1933," Staff Reports 921, Federal Reserve Bank of New York.
    6. Do, Quoc-Anh & Galbiati, Roberto & Marx, Benjamin & Ortiz Serrano, Miguel Angel, 2020. "J'Accuse! Antisemitism and Financial Markets in the time of the Dreyfus Affair," CEPR Discussion Papers 14826, C.E.P.R. Discussion Papers.
    7. David Kreitmeir & Nathan Lane & Paul A. Raschky, 2020. "The Value of Names - Civil Society, Information, and Governing Multinationals on the Global Periphery," SoDa Laboratories Working Paper Series 2020-10, Monash University, SoDa Laboratories.
    8. Quoc-Anh Do & Roberto Galbiati & Benjamin Marx & Miguel a Ortiz Serrano, 2020. "J’Accuse! Antisemitism and Financial Markets in the time of the Dreyfus Affair," SciencePo Working papers Main hal-02957438, HAL.
    9. repec:hal:wpspec:info:hdl:2441/5stdfj99hg96f8n537oi1mkfo9 is not listed on IDEAS

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    More about this item

    Keywords

    Discrimination; Managers; Firms; Nazi germany; “aryanizationsâ€;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • N8 - Economic History - - Micro-Business History
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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