Social Networks, Ethnicity, and Entrepreneurship
William Kerr () and
No 21597, NBER Working Papers from National Bureau of Economic Research, Inc
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 likely than other immigrants to operate dry cleaners, and Gujarati-speaking Indians are 108 times more likely to manage 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.
JEL-codes: D21 D22 D85 F22 J15 L14 L26 M13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-ind, nep-mig, nep-sbm, nep-soc and nep-ure
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Working Paper: Social Networks, Ethnicity, and Entrepreneurship (2016)
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