Social Networks, Ethnicity, and Entrepreneurship

Arbeitspapier

We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, the concentration of Korean self-employment in dry cleaners is 34 times greater than other immigrant groups, and Gujarati-speaking Indians are similarly 108 times more concentrated in managing motels. We develop a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills. The resulting scale economies generate occupational stratification along ethnic lines, consistent with the reoccurring phenomenon of small, socially-isolated groups achieving considerable economic success via concentrated entrepreneurship. Empirical evidence from the United States supports our model’s underlying mechanisms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6211

Classification and Topics

• Classification: Wirtschaft ; Entrepreneurship ; Firm Behavior: Theory ; Firm Behavior: Empirical Analysis ; Network Formation and Analysis: Theory ; International Migration ; Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination ; Transactional Relationships; Contracts and Reputation; Networks ; New Firms; Startups
• Subject: entrepreneurship ; self-employed ; occupation ; ethnicity ; immigration ; networks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kerr, William R. ; Mandorff, Martin
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/149298
• Last update: 10.03.2025, 11:44 AM CET