J’Accuse! Antisemitism and Financial Markets in the Time of the Dreyfus Affair

We study the stock market performance of firms with Jewish board members during the “Dreyfus Affair” in 19th century France. In a context of widespread latent antisemitism, initial accusations made against the Jewish officer Alfred Dreyfus led to short-lived abnormal negative returns for Jewish connected firms. However, investors betting on these firms earned higher raw and risk-adjusted returns during the period corresponding to Dreyfus’ rehabilitation, starting with the publication of the famous op-ed J’Accuse! in 1898. Our conceptual framework illustrates how diminishing antisemitic biases among investors might plausibly explain these differential returns. Our paper provides novel insights on how societal shifts in discriminatory attitudes affect financial markets.