Beyond Ethnic Enclaves: Location Strategies of Chinese Producer Service Firms in Los Angeles

Abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Clark University is collaborating with JSTOR to digitize, preserve and extend access to Economic Geography.Abstract: Ethnic enclaves are often not only the main residential areas for ethnic populations but also the prime locations for their businesses. As more and more ethnic enterprises locate outside such enclaves, the spatial pattern of ethnic business becomes more complex. To understand the spatial pattern of ethnic business, I argue that we need to go beyond treating "ethnic" as the only adjective. Drawing from the literature on industrial networks and territorial agglomeration, I examine the location patterns of ethnic producer services and their interfirm transaction networks. Chinese-owned firms in three types of producer services of Los Angeles County were selected: accounting, banking, and computer distribution. I collected information on networks and locations through surveys, interviews, and directories. This research found that location strategies are extremely important for ethnic entrepreneurs to exploit their market niches in all three sectors. While Chinese firms show markedly different spatial patterns from their non-Chinese counterparts, each type of producer service also differs from the others in spatial pattern. Accounting offices and bank branches concentrate in the Chinese central business district because of their Chinese-client-oriented network. A number of larger bank headquarters find downtown Los Angeles a favorable location because they are seeking international recognition and closer integration with mainstream financial institutions. Computer firms locate at the fringe of Chinese-concentrated areas and cluster with other Chinese computer distributors to participate in a product pool so that parts can be exchanged faster. I conclude that the spatial organization of ethnic business needs to be understood as the outcome of interaction between cultural and industrial identities of enterprises.Ethnic communities such as Chinatown, Little Italy, Koreantown, and Little Havana have long been a distinctive part of the American urban landscape. These enclaves not only serve as the main residential areas for ethnic populations, but also are identified as the prime locations for their businesses. In the last two decades, however, * This article was prepared as part of

Spatial Disparities in the Expansion of the Chinese Ethnoburb of Los Angeles

“…There is also a considerable concentration of Chinese media, including 15 Chinese daily newspapers, several journals, six Chinese-language television stations, many Chinese ethnic organizations, language schools, and social programs. This is the primary economic, cultural, and entertainment center for the Chinese population of the San Gabriel Valley (Zhou, 1998). Because of the predominance of Taiwanese immigrants in the early days, Monterey Park was initially dubbed ''Little Taipei,'' and then ''Little Beijing,'' but the population is now more panethnic with immigrants from all parts of the greater Chinese diaspora including immigrants from Hong Kong, the PRC, Vietnam and other parts of Southeast Asia.…”

“…There is an associated cluster of Chinese computer component producers. The ethnic networks within this agglomeration of enterprises helps these smaller computer distributors to flexibly specialize in contracts with shorter runs at lower prices than the larger national computer manufacturers (Zhou, 1998). One quarter of the 2200 enterprises located in the City of Industry are Chinese-owned (Phillips, 2003).…”

Entrepreneurship, ethnicity and local contexts: Hispanic entrepreneurs in three U.S. southern metropolitan areas

“…Kaplan (1998) hypothesizes that the clustering of ethnic businesses is often correlated with ethnic residential patterns. Similarly, certain types of Chinese producer and other professional services and consumer-serving businesses are found to be related to ethnic residential concentration in Los Angeles (Li 1998;Zhou 1998). Ethnic communities or neighborhoods, such as Chinatown, Koreatown, Little Italy, and Little Havana, not only serve as main residential places for ethnic populations, but also exist as the prime locations for their business activities: a ready source of lower cost labor, credit, a more homogenous market, well understood and common consumer preferences, various tangible and intangible resources networks, common religions, similar trust systems and an ability to enforce this trust.…”

Regrounding the ‘Ungrounded Empires’:localization as the geographical catalyst for transnationalism

“…A similar case is true in other professional services, such as legal, advertising, real estate and banking in the Chinese central business district (Tseng 1994a(Tseng , 1994bZhou 1998a). In other words, the restaurants, small family stores and factories that may be characterized by low-wage labour is an integral part of what builds the Chinese transnational phenomenon.…”