Resident Networks and Corporate Connections: Evidence from World War II Internment Camps
80 Pages Posted: 21 Dec 2013 Last revised: 24 Nov 2016
Date Written: November 23, 2016
Using customs and port authority data, we show that firms are significantly more likely to trade with countries that have a large resident population near their firm headquarters, and that these connected trades are their most valuable international trades. Using the formation of World War II Japanese Internment Camps to isolate exogenous shocks to local ethnic populations, we identify a causal link between local networks and firm trade. Firms are also more likely to acquire target firms, and report increased segment sales, in connected countries. Our results point to a surprisingly large role of immigrants as economic conduits for firms.
Keywords: Information networks, trade links, firm behavior
JEL Classification: F16, F30, G14
Suggested Citation: Suggested Citation