3 C5 Fong Eric3 C11 July
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3 C5 Fong Eric3 C11 July



Fashion, apparel, textile, merchandising, garmentsFashion, apparel, textile, merchandising, garments

Fashion, apparel, textile, merchandising, garmentsFashion, apparel, textile, merchandising, garments



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    3 C5 Fong Eric3 C11 July 3 C5 Fong Eric3 C11 July Presentation Transcript

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