Abstract

This study seeks to explore more deeply the economic and political aspects of Reunification and the role of the West German automobile industry in the Reunification process. Due to the importance of the automobile industry in rebuilding the East German economy, an examination of the German automobile industry's reaction to the announcement of Reunification would be an important and informative economic consideration in evaluating the positive and negative consequences of German Reunification. Therefore, through the application of a "special event" methodology utilized in financial research, I intend to discover whether the German automobile industry as a whole, and the individual firms which make up the industry, reacted positively or negatively to the announcement of German Reunification, and what these reactions could mean for the future of the industry and for the future of a united German nation.

This paper details the economic and political outlook in Germany during the early months of 1990, the investments made by the West German automobile industry in East Germany prior to the announcement of Reunification, and the methodology to be applied in this study. I will then provide an analysis of the automobile industry's reaction to the announcement of German Reunification.

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Business

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