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Social Networks, Ethnicity, and Entrepreneurship

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  • William R. Kerr
  • Martin Mandorff

Abstract

We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more concentrated in self employment for dry cleaning than other immigrant groups, and Gujarati-speaking Indians are 108 times more concentrated in managing motels. We quantify that smaller and more socially isolated ethnic groups display higher rates of entrepreneurial concentration. This is consistent with a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills and result in occupational stratification along ethnic lines via concentrated entrepreneurship.

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  • William R. Kerr & Martin Mandorff, 2015. "Social Networks, Ethnicity, and Entrepreneurship," NBER Working Papers 21597, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21597
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    Cited by:

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    2. Paola Giuliano & Marco Tabellini, 2020. "The Seeds of Ideology: Historical Immigration and Political Preferences in the United States," NBER Working Papers 27238, National Bureau of Economic Research, Inc.
    3. Dagnelie, Olivier & Mayda, Anna Maria & Maystadt, Jean-François, 2019. "The labor market integration of refugees in the United States: Do entrepreneurs in the network help?," European Economic Review, Elsevier, vol. 111(C), pages 257-272.
    4. Christopher F. Baum & Linda Dastory & Hans Lööf & Andreas Stephan, 2018. "Migrant STEM Entrepreneurs," Boston College Working Papers in Economics 965, Boston College Department of Economics.
    5. Sari Pekkala Kerr & William R. Kerr, 2016. "Immigrant Entrepreneurship," NBER Chapters, in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, pages 187-249, National Bureau of Economic Research, Inc.
    6. Sari Pekkala Kerr & William R. Kerr, 2019. "Immigrant Networking and Collaboration: Survey Evidence from CIC," NBER Chapters, in: The Roles of Immigrants and Foreign Students in US Science, Innovation, and Entrepreneurship, pages 173-205, National Bureau of Economic Research, Inc.
    7. Ferrucci, Edoardo & Lissoni, Francesco, 2019. "Foreign inventors in Europe and the United States: Diversity and Patent Quality," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    8. Sabrina T. Howell & Ramana Nanda, 2019. "Networking Frictions in Venture Capital, and the Gender Gap in Entrepreneurship," Harvard Business School Working Papers 19-105, Harvard Business School, revised Oct 2019.
    9. Cat-My Dang & Aki Harima, 2020. "Dual Embeddedness and Entrepreneurial Activities of Second-Generation Ethnic Entrepreneurs: Multiple Case Studies with Vietnamese Entrepreneurs in Germany," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 6(1), pages 84-113, January.
    10. Aldén, Lina & Bastani, Spencer & Hammarstedt, Mats & Miao, Chizheng, 2020. "Ethnic Differences in Long-Term Self-Employment," Working Paper Series 1361, Research Institute of Industrial Economics.
    11. Shulamit Kahn & Giulia La Mattina & Megan MacGarvie, 2017. "“Misfits,” “stars,” and immigrant entrepreneurship," Small Business Economics, Springer, vol. 49(3), pages 533-557, October.
    12. Emilia Nercissians, 2019. "The historical anthropology of the seventeenth century entrepreneurial activities of the Armenian merchants in New Julfa," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-13, December.
    13. Caviggioli, Federico & Jensen, Paul & Scellato, Giuseppe, 2020. "Highly skilled migrants and technological diversification in the US and Europe," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    14. Maxwell Mkondiwa, 2020. "Mancala board games and origins of entrepreneurship in Africa," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-23, October.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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