Heterogeneous effect of ethnic networks on international trade of Thailand: The role of family ties and ethnic diversity

Ethnic networks have been found to have a pro-trade effect in previous research. However, the heterogeneous effect of different ethnicities is under-studied. Drawing on the literature on social structure, this paper attempts to untangle the heterogeneous effect of ethnic networks on international trade using trade data of Thailand. We found that ethnic networks have a positive impact overall on trade, confirming the results of previous studies. However, the magnitude of the positive effect varies across different ethnicities along two dimensions. First, the strength of family ties in the culture of origin accelerates the pro-trade effect of its ethnic networks, suggesting ethnicities with stronger family ties have a cultural preference for trading within their own ethnic community. In comparison, ethnic diversity weakens the positive effect of ethnic networks on trade, suggesting an informational value of diverse ethnic structure in promoting trade between different ethnicities. Our study contributes new evidence of the enduring influence of social and cultural attributes on economic activities.