Eventi del

14 2018 12:30
Sala Riunioni 5.e4.sr04 - Via Roentgen 1

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

Fabian Waldinger (University of Munich)

 

Abstract

When discriminatory attitudes influence the decisions of governments and firms, highly qualified individuals from discriminated groups are often excluded from important positions in the economy. This paper quantifies the economic losses that can result from such discrimination at the top. Specifically, we investigate how the forced removal of managers with Jewish origins in Nazi Germany affected large firms. The loss of Jewish managers significantly reduced the stock prices of affected firms, for at least 10 years after the Nazis came to power. We find particularly strong stock price reductions for firms where the removal of the Jewish managers led to large decreases in managerial connections to other firms and in the number of university-educated managers. Dividend payments and returns on assets also declined. A back-of-the-envelope calculation suggests that the aggregate market valuation of firms listed in Berlin fell by 1.8 percent of German GNP. The findings imply that discrimination can lead to first-order economic losses.