Abstract
We study the effect of discrimination against Jewish managers and owners on their firms' stock during the Third Reich. The stock of firms with Jewish managers underperformed by around 5% annually, with abnormal performance persisting on average for three years until firm Aryanization. Firms with Jewish owners perform much like firms without any Jewish involvement. We identify harassment of Jewish-managed firms as the leading cause for the discount. Alternative explanations, such as brain drain and Jewish stigma, seem less relevant. We find that discriminating against a minority can have a negative effect on an entire economy.
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