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Betting on Hitler—The Value of Political Connections in Nazi Germany

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  • Thomas Ferguson
  • Hans-Joachim Voth

Abstract

This paper examines the value of connections between German industry and the Nazi movement in early 1933. Drawing on previously unused contemporary sources about management and supervisory board composition and stock returns, we find that one out of seven firms, and a large proportion of the biggest companies, had substantive links with the National Socialist German Workers' Party. Firms supporting the Nazi movement experienced unusually high returns, outperforming unconnected ones by 5% to 8% between January and March 1933. These results are not driven by sectoral composition and are robust to alternative estimators and definitions of affiliation.

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  • Thomas Ferguson & Hans-Joachim Voth, 2008. "Betting on Hitler—The Value of Political Connections in Nazi Germany," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 101-137.
  • Handle: RePEc:oup:qjecon:v:123:y:2008:i:1:p:101-137.
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