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

Fabian Waldinger, Kilian Huber and Volker Lindenthal

No 13089, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Discrimination; Managers; Firms; Nazi germany; “aryanizations†(search for similar items in EconPapers)
JEL-codes: G30 J7 J71 N24 N34 N8 (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-his and nep-hrm
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Citations: View citations in EconPapers (16)

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