Channels of Influence

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Channels of Influence

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dc.contributor.author Cohen, Lauren Harry
dc.contributor.author Gurun, Umit G.
dc.contributor.author Malloy, Christopher James
dc.date.accessioned 2012-08-07T19:12:43Z
dc.date.issued 2012-08-07
dc.identifier.citation Cohen, Lauren, Umit G. Gurun, and Christopher J. Malloy. "Channels of Influence." Harvard Business School Working Paper, No. 13-013, August 2012 en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:9369295
dc.description.abstract We demonstrate that simply by using the ethnic makeup surrounding a firm’s location, we can predict, on average, which trade links are valuable for firms. Using customs and port authority data on the international shipments of all U.S. publicly-traded firms, we show that firms are significantly more likely to trade with countries that have a strong resident population near their firm headquarters. We use the formation of World War II Japanese Internment Camps to isolate exogenous shocks to local ethnic populations, and identify a causal link between local networks and firm trade links. Firms that exploit their local networks (strategic traders) see significant increases in future sales growth and profitability, and outperform other importers and exporters by 5%-7% per year in risk-adjusted stock returns. In sum, our results document a surprisingly large impact of immigrants’ economic role as conduits of information for firms in their new countries. en_US
dc.language.iso en_US en_US
dash.license OAP
dc.subject Information networks en_US
dc.subject trade links en_US
dc.subject firm behavior en_US
dc.title Channels of Influence en_US
dc.type Research Paper or Report en_US
dc.description.version Author's Original en_US
dc.relation.journal Harvard Business School working paper series en_US
dash.depositing.author Malloy, Christopher James
dc.date.available 2012-08-07T19:12:43Z

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