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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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    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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