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Resident Networks and Corporate Connections: Evidence from World War II Internment Camps
Author(s) -
COHEN LAUREN,
GURUN UMIT G.,
MALLOY CHRISTOPHER
Publication year - 2017
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/jofi.12407
Subject(s) - port (circuit theory) , immigration , point (geometry) , world war ii , first world war , population , business , ethnic group , demographic economics , economics , political science , history , sociology , law , engineering , demography , ancient history , geometry , mathematics , electrical engineering
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.