More from these Authors

• Working Paper | 2013

  Resident Networks and Firm Trade

  Lauren Cohen, Umit G. Gurun, Christopher J. Malloy, Lauren Cohen, Umit G. Gurun and Christopher J. Malloy

  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.

  Keywords: Information networks; trade links; firm behavior;

  Citation:

  Cohen, Lauren, Umit G. Gurun, and Christopher J. Malloy. "Resident Networks and Firm Trade." Working Paper, March 2013.

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• Working Paper | 2013

  Resident Networks and Firm Trade

  Lauren Cohen, Umit G. Gurun, Christopher J. Malloy, Lauren Cohen, Umit G. Gurun and Christopher J. Malloy

  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.

  Keywords: Information networks; trade links; firm behavior;

  Citation:

  Cohen, Lauren, Umit G. Gurun, and Christopher J. Malloy. "Resident Networks and Firm Trade." Working Paper, March 2013.

  CiteView DetailsRead Now

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• Supplement | HBS Case Collection | 2013

  AQR's Delta Strategy (CW)

  Lauren Cohen, Christopher J. Malloy, Lauren Cohen and Christopher J. Malloy

  Citation:

  Cohen, Lauren, and Christopher J. Malloy. "AQR's Delta Strategy (CW)." Harvard Business School Spreadsheet Supplement 213-711, February 2013.

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