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Journal of Finance Vol. 72 No. 1 2017

Resident Networks and Corporate Connections: Evidence from World War II Internment Camps

Lauren Cohen; Umit G. Gurun1; Christopher J. Malloy2

1 University of Texas at Dallas and NBER · 2 Cohen is at the Harvard Business School and NBER, Gurun is at the University of Texas at Dallas and NBER, and Malloy is at the Harvard Business School and NBER. We thank Joshua Aizenman, Gennaro Bernile, Geoffrey Booth, Lee Branstetter, Bill Cready, Robert Feenstra, Fritz Foley, Rob Hansen,George Ko

Abstract

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.

DOI
10.1111/jofi.12407
Volume
72
Issue
1
Pages
207-248
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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