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Communities of Commerce: The Legacy of Chinese Immigration on Java

Author

Listed:
  • Quoc-Anh Do
  • Sebastian Ellingsen
  • Gedeon Lim

Abstract

This paper studies the long-run impacts of diasporas on local economic development. We do so in the context of one of the most economically influential diasporas: the ethnic Chinese in Southeast Asia. Our instrumental variables strategy exploits 15th-century landing sites on Java that shaped subsequent Chinese settlement but lost maritime access due to 17th-century silting. We find that a 1p.p. higher Chinese share in 1930 leads to 9.4% higher household consumption and 26% higher population today. These effects attenuate sharply during the 1997-1998 crisis, then recover. We find strong effects on firm sales driven by improved financing through local private networks but not through exports. We provide suggestive evidence for the key role of historical ethnic-trading networks within Java. Our findings suggest that despite their small size, ethnic minorities with durable complementarities can play an out-sized, positive role in local economic development.

Suggested Citation

  • Quoc-Anh Do & Sebastian Ellingsen & Gedeon Lim, 2026. "Communities of Commerce: The Legacy of Chinese Immigration on Java," CESifo Working Paper Series 12893, CESifo.
    • Handle: RePEc:ces:ceswps:_12893
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    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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