Ethnic Businesses In Multiethnic Cities

888 views
834 views

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
888
On SlideShare
0
From Embeds
0
Number of Embeds
9
Actions
Shares
0
Downloads
12
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Ethnic Businesses In Multiethnic Cities

  1. 1. Ethnic Businesses in Multiethnic Cities Eric Fong, Emily Anderson, Wenhong Chen, and Chiu Luk University of Toronto July 2007
  2. 5. Overview <ul><li>An examination of ethnic business locations in multiethnic cities </li></ul><ul><ul><li>Multiethnic : Patterns of ethnic business location in neighborhoods with various racial and ethnic compositions </li></ul></ul><ul><ul><li>Multi-industry : Patterns of ethnic business location for certain major industries </li></ul></ul><ul><li>Argument: Ethnic business location is determined by optimization of: </li></ul><ul><ul><li>Neighborhood business environment, </li></ul></ul><ul><ul><li>Unique locational demand of each industry, and </li></ul></ul><ul><ul><li>Spatial consequences of ethnic embedded structures of ethnic businesses. </li></ul></ul>
  3. 6. Overview <ul><li>Literature Review </li></ul><ul><li>Discussion of Neighborhood Types and Industrial Sectors </li></ul><ul><li>Presentation of Hypotheses </li></ul><ul><li>Data and Methods </li></ul><ul><li>Results and Discussion </li></ul>
  4. 7. Literature Review <ul><li>Sociological Theory </li></ul><ul><ul><li>The Chicago School: Ethnic business locations reflect the size of the ethnic population (Burgess, 1925) </li></ul></ul><ul><ul><li>Concept of Social Capital: Ethnic communities linked structurally, embedded ethnic relations (Portes and Sensenbrenner, 1993) </li></ul></ul>
  5. 8. Theoretical Background <ul><li>Geographical Theory </li></ul><ul><ul><li>Neo-classical “optimization” approach to business location (Weber, 1909; L ösch, 1949) </li></ul></ul><ul><ul><li>Structural linkages in ethnic and economic relations are facilitated and reinforced by spatial proximity (Dicken and Lloyd, 1990) </li></ul></ul><ul><ul><li>Dense patterns linkages create agglomeration economies whose benefits to all involved vastly outweigh their costs (Scott, 1998) </li></ul></ul>
  6. 9. Four Neighborhood Types <ul><li>Ethnic Enclave Neighborhood </li></ul><ul><li>Ethnic Clustered Neighborhood </li></ul><ul><li>Minority Neighborhood </li></ul><ul><li>Non-Minority, Non-Ethnic Neighborhood </li></ul>
  7. 10. The Ethnic Enclave Neighborhood <ul><li>Central to the ethnic community both socially and economically </li></ul><ul><li>High ethnic concentration </li></ul><ul><ul><li>Many new immigrants </li></ul></ul><ul><li>Home to many ethnic businesses (Zhou 1992, Kwong 1979). </li></ul><ul><ul><li>Sustained by a sizeable local ethnic population </li></ul></ul>
  8. 11. The Ethnic Clustered Neighborhood <ul><li>Lower ethnic proportion than enclave, but still has an ethnic character </li></ul><ul><li>Provide goods and services demanded by both the ethnic and non-ethnic communities residing there (Logan et al, 2002) </li></ul><ul><li>Usually located adjacent to ethnic enclaves and spread over large area </li></ul>
  9. 12. The Minority Neighborhood <ul><li>Substantial number of other ethnic or minority group residents – commonly found in multiethnic cities </li></ul><ul><li>Not always located next to each other </li></ul><ul><li>Frequently dominated by their own businesses, but often contain a number of establishments operated by other ethnic groups </li></ul>
  10. 13. The Non-Ethnic, Non-Minority Neighborhood <ul><li>No substantial proportion of ethnic members or minorities, often referred to as “majority” </li></ul><ul><li>Industrially diverse yet proportionally few ethnic businesses </li></ul>
  11. 14. Four Unique Local Business Environments: <ul><li>1. The ethnic enclave neighborhood: </li></ul><ul><ul><li>Many ethnic businesses </li></ul></ul><ul><ul><li>Low industrial diversity among ethnic businesses </li></ul></ul><ul><ul><li>Larger proportion of recent ethnic immigrants </li></ul></ul><ul><li>2. The ethnic clustered neighborhood: </li></ul><ul><ul><li>A large number of clustered ethnic businesses </li></ul></ul><ul><ul><li>Many recent ethnic immigrants (but fewer than in the enclave) </li></ul></ul><ul><li>3. The minority neighborhood: </li></ul><ul><ul><li>A smaller number of ethnic businesses </li></ul></ul><ul><ul><li>A small proportion of ethnic businesses in adjacent neighborhoods </li></ul></ul><ul><li>4. The non-ethnic/minority neighborhood: </li></ul><ul><ul><li>A small number of ethnic businesses </li></ul></ul><ul><ul><li>High levels of industrial diversity </li></ul></ul>
  12. 15. Four Major Industrial Sectors: <ul><li>1. Manufacturing </li></ul><ul><li>2. Retail </li></ul><ul><li>3. Food Retail </li></ul><ul><li>4. Finance, Insurance, and Real Estate </li></ul>
  13. 16. Ethnic Manufacturing Sector <ul><li>Industrial Characteristics </li></ul><ul><ul><li>Small ethnic firms, often in subcontracting roles </li></ul></ul><ul><ul><li>Labor intensive, unpleasant working environments, high turnover </li></ul></ul><ul><ul><li>Labor pool includes members of other ethnic groups </li></ul></ul><ul><li>Unique spatial characteristics </li></ul><ul><ul><li>Need to locate near source of labor supply </li></ul></ul><ul><ul><li>Avoid ethnic agglomeration with other co-ethnic businesses </li></ul></ul><ul><ul><li>Seek ethnic agglomeration with other manufacturing businesses </li></ul></ul><ul><ul><li>Locate close to suppliers and transportation infrastructure </li></ul></ul>
  14. 17. Ethnic Retail Sector <ul><li>Industrial Characteristics </li></ul><ul><ul><li>Not food retailers; instead, are apparel stores, general wares, dollar stores, gas stations (Zhou) </li></ul></ul><ul><ul><li>Need to attract a wide variety of customers to reach profit </li></ul></ul><ul><ul><li>Offer diverse products and services to their customers </li></ul></ul><ul><li>Unique spatial characteristics </li></ul><ul><ul><li>Seek locations where there are other businesses to maximize flow of shoppers </li></ul></ul><ul><ul><li>Frequently serve co-ethnic members, so choose locations convenient to them in ethnic enclave or clustered neighborhoods </li></ul></ul>
  15. 18. Ethnic Food Retail Sector <ul><li>Industrial Characteristics </li></ul><ul><ul><li>Often small in scale, deeply embedded in ethnic networks for recruiting workers and obtaining market information (Song, 1995) </li></ul></ul><ul><ul><li>Most customers are co-ethnic </li></ul></ul><ul><li>Unique Spatial Characteristics </li></ul><ul><ul><li>Prefer locations with highest number of co-ethnic members, but may be discouraged by the high rents of ethnic enclaves </li></ul></ul><ul><ul><li>Smaller retailers mitigate high rents by locating in ethnic clustered neighborhoods, which still lets them access many co-ethnic customers. </li></ul></ul><ul><ul><li>Take advantage of scale economies by agglomerating with other food retailers </li></ul></ul><ul><ul><li>Low industrial diversity </li></ul></ul>
  16. 19. Ethnic Financial, Insurance, and Real Estate Sector <ul><li>Finance, Insurance, and Real Estate Sector </li></ul><ul><ul><li>Provide loans, mortgages, insurance coverage to ethnic entrepreneurs and homebuyers </li></ul></ul><ul><ul><li>Strong “interweaving” relationships that facilitate information sharing, trust </li></ul></ul><ul><li>Unique Spatial Characteristics </li></ul><ul><ul><li>Clustering to maintain essential business linkages </li></ul></ul><ul><ul><li>Prefer locations in ethnic enclaves: main venue for selling products and services to the widest range of co-ethnic customers </li></ul></ul>
  17. 20. Hypotheses: Locational Preferences of Ethnic Industrial Sectors <ul><li>Manufacturing Industry </li></ul><ul><ul><li>Fewer ethnic businesses </li></ul></ul><ul><ul><li>Lower industrial diversity </li></ul></ul><ul><ul><li>Fewer co-ethnic workers </li></ul></ul><ul><li>Retail Industry </li></ul><ul><ul><li>Higher industrial diversity </li></ul></ul><ul><ul><li>Larger ethnic populations </li></ul></ul><ul><li>Food Retail Industry </li></ul><ul><ul><li>High co-ethnic population </li></ul></ul><ul><ul><li>Fewer nearby ethnic businesses </li></ul></ul><ul><ul><li>Lower overall industrial diversity </li></ul></ul><ul><li>Finance, Insurance, and Real Estate Industries </li></ul><ul><ul><li>Larger co-ethnic populations </li></ul></ul><ul><ul><li>Lower industrial diversity among all ethnic businesses </li></ul></ul><ul><ul><li>Lower proportions of recent immigrants </li></ul></ul>
  18. 21. Summary Hypothesis Matrix
  19. 22. Data <ul><li>Business Directories: 2000 City of Toronto, 2001 York Region </li></ul><ul><li>2001 Census Tract Data </li></ul><ul><li>included 85% Chinese in Toronto census metropolitan area </li></ul><ul><li>Chinese businesses: </li></ul><ul><ul><li>business name: </li></ul></ul><ul><ul><ul><li>sounds like a translation from Chinese (e.g. Wah Fung) </li></ul></ul></ul><ul><ul><ul><li>uses a typically Chinese expression (e.g. Golden Happiness) </li></ul></ul></ul><ul><ul><ul><li>comes from a well-known landmark in Hong Kong, mainland China, or Taiwan </li></ul></ul></ul><ul><ul><li>contact name: </li></ul></ul><ul><ul><ul><li>President, owner </li></ul></ul></ul>
  20. 23. Results: Table 1
  21. 24. Results: Table 2
  22. 25. <ul><li>Controlling for the business size: </li></ul><ul><ul><li>Chinese manufacturing firms: </li></ul></ul><ul><ul><ul><li>↓ Chinese enclave neighborhoods </li></ul></ul></ul><ul><ul><ul><li>↑ non-Chinese/non-visible minority neighborhoods </li></ul></ul></ul><ul><ul><li>Chinese retails other than food retails: </li></ul></ul><ul><ul><ul><li>↑ Chinese enclave neighborhoods </li></ul></ul></ul><ul><ul><ul><li>↓ non-Chinese/non-visible minority neighborhoods </li></ul></ul></ul><ul><ul><li>Chinese food retails: </li></ul></ul><ul><ul><ul><li>↓ Chinese enclave neighborhoods </li></ul></ul></ul><ul><ul><ul><li>↑ Chinese clustered neighborhoods </li></ul></ul></ul><ul><ul><li>Chinese FIRE businesses </li></ul></ul><ul><ul><ul><li>↑ Chinese enclave neighborhoods. </li></ul></ul></ul>
  23. 26. Results: Table 3
  24. 27. Results: Table 4
  25. 28. Conclusion <ul><li>The results of our analysis have shown the existence of different locational patterns by ethnic businesses involved in different industrial sectors. </li></ul><ul><li>Locations of ethnic businesses reflect the match among locational demands of a particular industry, spatial consequences of ethnic embedded structures, and a particular business environment of the neighborhood. Our data in general confirm our central assertion. </li></ul>

×