Ethnic Networks and U.S. Exports

Abstract

This paper provides new estimates of the effects of ethnic network on U.S. exports. In line with recent research, our dataset is a panel of exports from U.S. states to 29 foreign countries. Our analysis departs from the literature in two ways, both of which have noteworthy empirical consequences. Our main departure is to remove the restriction that the network effect is the same for all ethnicities. In addition, because our dataset contains a time dimension, we are able to control for unobserved heterogeneity with properly specified fixed effects. We find that ethnic-network effects are much larger than has been estimated previously, although they are important only for a subset of countries.

Note: An updated version of this paper can be found at: http://ssrn.com/abstract=877209

Keywords: Ethnic networks, state exports

JEL Classification: F10, R10