Full Citation
Title: Bound by Ancestors: Immigration, Credit Frictions, and Global Supply Chain Formation
Citation Type: Miscellaneous
Publication Year: 2022
ISBN:
ISSN:
DOI: 10.1287/MSOM.2022.1136
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Abstract: This paper shows that the ancestry composition shaped by century-long immigration to the US can explain the current structure of global supply chain networks. Using an instrumental variable strategy, combined with a novel dataset that links firm-to-firm global supply chain information with a US establishment database and historical migration data, we find that the co-ethnic networks formed by immigration have a positive causal impact on global supply chain relationships between foreign countries and US counties. Such a positive impact not only exists in conventional supplier-customer relationships but also extends to strategic partnerships and trade in services. Examining the causal mechanisms, we find that the positive impact is stronger for counties in which more credit-constrained firms are located and that such a stronger effect becomes even more pronounced for foreign firms located in countries with weak contract enforcement. Collectively, the results suggest that co-ethnic networks serve as social collateral to overcome credit constraints and facilitate global supply chain formation.
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Authors: Choi, Jaerim; Hyun, Jay; Park, Ziho
Publisher:
Data Collections: IPUMS USA
Topics: Migration and Immigration, Population Mobility and Spatial Demography
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