Social Networks, Ethnicity, and Entrepreneurship
William Kerr () and
No 6211, CESifo Working Paper Series from CESifo Group Munich
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 modelâ€™s underlying mechanisms.
Keywords: entrepreneurship; self-employed; occupation; ethnicity; immigration; networks (search for similar items in EconPapers)
JEL-codes: L26 D21 D22 D85 F22 J15 L14 M13 (search for similar items in EconPapers)
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Working Paper: Social Networks, Ethnicity, and Entrepreneurship (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6211
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