Whose Job Is It Anyway? Coethnic Hiring in New US Ventures

We explore coethnic hiring among new ventures, using US administrative data. Coethnic hiring is ubiquitous among immigrant groups, averaging about 22.5% and ranging from less than 2% to more than 40%. Coethnic hiring grows with the size of the local ethnic workforce, greater linguistic distance to English, and lower cultural/genetic similarity to US natives and in harsher policy environments for immigrants. Coethnic hiring is remarkably persistent for ventures and for individuals. Coethnic hiring is associated with greater venture survival and growth when thick local ethnic employment surrounds the business. Our results are consistent with a blend of hiring due to information advantages within ethnic groups and some taste-based hiring.