How big was the Nazi premium?

Every now and then I like to post about history:

Firms connected with the Nazi party outperformed unaffiliated firms
massively. Their share prices rose by 7.2% between January and March
1933 (43% annualised), compared to 0.2% (1.2% annualised) for
unaffiliated firms. The politically induced change was equivalent to
5.8% of total market capitalisation. This is a high number by
international standards. Johnson and Mitton (2003) estimate that
revaluation of political connections in Malaysia during the East Asian
crisis wiped 5.8% of share values. While comparable in magnitude, it
took 12 months for this change to occur.

Here is more, interesting throughout.

Comments

Is causality well controlled for in this study (didn't read it)? It strikes me that cooperation with the Nazis may have been a signal that firms had a future that they wanted to protect, so it could have just signaled a better future during a trying economic time.

@liberalarts: Not ethat this happened in only two months, and presumably the effects were not that strong in other periods.

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