This paper demonstrates that the ancestry composition resulting from centuries of immigration to the US influences the current structure of global supply chains. By using an instrumental variable strategy and a new dataset linking firm-to-firm global supply chains with location and historical migration data, we find that co-ethnic networks have a significant positive impact on these relationships between foreign countries and US counties. This impact is seen not only in supplier-customer relationships but also in strategic partnerships and trade in services.
The positive effect is more pronounced in counties where many firms face credit constraints, and it becomes even stronger when foreign firms are in countries with weak contract enforcement. These findings suggest that co-ethnic networks act as social collateral, helping to overcome credit constraints and facilitate the formation of global supply chains.