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

Thomas Ferguson and Hans-Joachim Voth
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Thomas Ferguson: University of Massachusetts at Boston

The Quarterly Journal of Economics, 2008, vol. 123, issue 1, pages 101-137

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. (c) 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..

Date: 2008
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Working Paper: Betting on Hitler - The Value of Political Connections in Nazi Germany (2005)
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