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Does Ethnicity Pay

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  • Yasheng Huang
  • Li Jin
  • Yi Qian

Abstract

Most of the economic analyses of the overseas-Chinese network focus on trade and investment flows at the country level. In this paper, we analyze the effects of the ethnic Chinese network at the firm level. Contrary to the conventional wisdom, we find that ethnic-Chinese FDI firms in China in fact underperform non-ethnic-Chinese FDI firms. We also find that the performance of ethnic-Chinese firms deteriorates over time. We present evidence consistent with the hypothesis that ethnic-Chinese firms under-invest in those firm attributes that may enhance long-term performance, such as human capital and technology. Our findings raise both empirical and normative implications of ethnic ties.

Suggested Citation

  • Yasheng Huang & Li Jin & Yi Qian, 2010. "Does Ethnicity Pay," NBER Working Papers 16294, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16294
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. “Does Ethnicity Pay?,” Y. Huang, L. Jin & Y. Qian (2010)
      by afinetheorem in A Fine Theorem on 2013-09-24 18:25:15

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    Cited by:

    1. Yuriy Gorodnichenko & Gerard Roland, 2017. "Culture, Institutions, and the Wealth of Nations," The Review of Economics and Statistics, MIT Press, vol. 99(3), pages 402-416, July.
    2. C. Fritz Foley & William R. Kerr, 2013. "Ethnic Innovation and U.S. Multinational Firm Activity," Management Science, INFORMS, vol. 59(7), pages 1529-1544, July.
    3. Wang, Daili, 2013. "鼓励还是抑制？初探外商直接投资与新民营企业进入 [Foreign Direct Investment and the Entry of New Firms]," MPRA Paper 50984, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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