Harnessing Social Capital for Post-COVID-19 Resilience: A Study of Asian Businesses in New York City

Abstract

Prior studies have explored how Asian businesses leverage social capital for success, but little attention has been given to its role in disaster recovery. This study addresses this gap by highlighting social capital’s impact on recovery strategies. Twenty-three business interviews were conducted in Chinatown, Manhattan, NYC, and the research unveils that ethnic social capital, including co-ethnic labor, secured market access, in-kind support, and information sharing, constitutes instrumental resources for their recovery. Moreover, it is linked to the intersecting identities—immigrant, minority, and Asian. These findings underscore the importance of comprehending ethnic social capital to foster both business resilience and local economic recovery.

Keywords

Ethnic Social Capital Asian Business Minority-Owned Business Business Resilience Local Economic Recovery

Introduction

The COVID-19 pandemic has presented significant recovery challenges for Asian businesses. These challenges are multifaceted and include the fact that many Asian businesses operating in the service and retail sectors were severely impacted by customer behaviors related to physical distancing and mandated shutdowns during the pandemic (Dang et al. 2020; Song, Yeon, and Lee 2021). In addition, these businesses faced distinctive challenges due to xenophobia, racial harassment, and social stigma fueled by debates surrounding the origins of COVID-19, which further exacerbated their losses (Ong, Zhang, and Shaw 2021). For example, some Asian businesses experienced a downturn as early as February 2020, a month before the national shutdown, due to xenophobia and the loss of customers (Olson and Tang 2020).

However, Asian businesses in the United States play a prominent role in the nation’s economy, encompassing a diverse array of entrepreneurial ventures led by individuals of Asian descent who migrated to the United States (Chand and Ghorbani 2011). These businesses have exhibited remarkable growth, outpacing other minority- and white-owned businesses (Bates, Farhat, and Casey 2022). According to U.S. Census Bureau (2020), the total sales of Asian businesses (including Asian American, Native Hawaiian, and Pacific Islander) in 2019 were significantly higher ($988.8 billion) compared with other racial groups. For instance, Hispanic businesses had total sales of $619.8 billion. This comparison underscores the substantial economic impact and contributions of Asian businesses. This suggests that Asian businesses, collectively, had a larger economic impact and contribution in terms of sales during that period.

This study addresses various research gaps by investigating the experience of Asian businesses in recovering from COVID-19. First, although extensive research has been conducted on economic recovery and support for small businesses, it has predominantly focused on the resource usage of local businesses and government initiatives (Flynn 2007; Runyan 2006; Watson 2024). Nevertheless, there is a notable lack of understanding regarding the recovery resources and experiences specifically concerning minority-owned businesses. Second, the COVID-19 experiences of Asian businesses can be influenced by intersectionality of multiple factors, including their immigrant status, minority background, and Asian American identity, which have been identified to hinder this group’s recovery from COVID-19 (Ma et al. 2021). It is essential to understand how these intersecting identities influence the usage of social capital for business recovery. Third, the intricate nature of social capital adds to the conflicting evidence surrounding its influence on businesses. Despite its broad application in social sciences, a precise definition of ethnic social capital is lacking, leading to varied interpretations and measurements. This lack of consensus results in contradictory findings regarding its business effects. Thus, this study emphasizes the need for a more nuanced approach to assessing its impact.

Literature Review

Role of Social Capital on Minority-Owned Business Recovery

The logic of studying social capital use in minority business recovery has three bases. The first basis lies in emerging evidence from the literature on the value of social capital in building resilience in small businesses at large. Social capital enables businesses to access resources and opportunities through their network of relationships—extending from individuals to communities and institutions—to access resources for growth and disaster recovery (Cope, Jack, and Rose 2007; Torres, Marshall, and Sydnor 2019). It can directly facilitate access to financial resources, partnerships, and market insights, while indirectly fostering reputation building and a conducive business environment (Azmat 2010; Moon 2001). For instance, stronger social networks in the community can improve access to programs like Paycheck Protection Program (PPP) loans, as they play a crucial role in disseminating information and simplifying application processes (Maksimovic, Xue, and Yang 2023).

The second basis pertains to the significance of social capital within historically marginalized groups and their intersectional experiences of businesses in recovery—discussed further in the next section (Engbers and Rubin 2018; Kyne and Aldrich 2020). Broadly speaking, strong social connections can empower marginalized groups to advocate for policy reforms, amplify their voices, and mobilize resources to confront systemic inequalities and injustices (Campbell 2020). For minority and immigrant businesses specifically, social capital fosters strong bonds of trust and mutual understanding among individuals, facilitating collaboration, resource sharing, and collective problem-solving amid challenges, such as language barriers, discrimination, and limited access to mainstream resources (Bates, Farhat, and Casey 2022). These insights imply that minority characteristics of businesses, such as the ethnicity of the owner or the presence of an ethnic consumer base, can affect their recovery experiences after disasters.

The final basis is based on the emerging idea that small businesses play dual roles as both social and economic entities in community recovery. Unlike previous research, which mainly views businesses through a purely market economy lens, namely, businesses supply goods and services in response to consumer demand and labor provision (attributed to households), this newer literature explores their social dimensions. For example, Xiao et al. (2019) show that small businesses in recovery share many social characteristics with households (such as dependence on networks, desire for government aid, and place attachment) thus highlighting the need to treat businesses as “social units” of a community equal to households. This finding is supported by a number of empirical studies that have highlighted the importance of social policy orientations, such as business owner race and ethnicity, use of social networks and ease of obtaining government aid, to small business recovery (Aghababaei et al. 2021; Asgary, Anjum, and Azimi 2012; Flott 1996; Runyan 2006). Findings from studies on social capital within conventional “social” units, such as individuals or households may also hold some explanatory power for understanding business dynamics. This emphasizes the importance of exploring social factors, such as social capital use in minority businesses, as in this study.

It is important to note here that social capital may manifest differently for small businesses and minority businesses. While both types benefit from bonding, bridging, and linking social capital, the specific nature of these connections varies based on their respective contexts and challenges (see Table 1). Understanding these different types of social capital is essential for fostering growth and resilience within both small and minority-owned businesses.

Table 1.

Comparison of Social Capital on Small and Minority-Owned Businesses.

	Small business	Minority-owned business
Bonding	Resources obtained from close connections within the group, such as family members, friends, and neighbors (Aldrich 2012a)	Establishes trust and cooperation within specific minority communities, driven by shared identities and experiences. This can benefit minority entrepreneurs who face similar challenges (Aldrich 2012b)
Bridging	Resources acquired from horizontal relationships in business operations, including suppliers, distributors, employees, and customers (Moon 2001)	Uses connections with other ethnic business owners, religious groups, and ethnic associations to leverage shared cultural backgrounds and language affinity (Galabuzi and Teelucksingh 2010)
Linking	Resources are obtained from vertical relationships in power or authoritative entities, such as governmental agencies or institutions (Woolcock 2001)	Establishes relationships with influential organizations that offer resources and market opportunities tailored to the needs and challenges faced by minority-owned businesses (Deakins et al. 2007)

Intersectionality: Asian Business Recovery

To comprehend the recovery journey of Asian businesses fully, it is essential to analyze how their conventional business characteristics intersect with their immigrant and racial identities. These identities influence their recovery experiences in a manner akin to other social units, like minority households and individuals, thus allowing insights from diverse literature domains beyond economic development to inform minority business recovery. However, grasping the use of social capital in immigrant/minority-owned businesses necessitates examining the social identities shaped by the race, ethnicity, and immigrant status of owners, managers, employees, or customers, as these dynamics are crucial for understanding minority business operations.

In particular, the experience of establishing social networks and using them may vary significantly yet share similarities among immigrant, minority, and Asian businesses based on these intersecting identities. For instance, research on immigrant-owned businesses often highlights the reliance on bonding social capital rooted in trust and familiarity within their ethnic communities to garner support (Turkina and Thai 2013). On the other hand, minority-owned businesses are shown to frequently face challenges related to systemic discrimination and disparities in resource access, such as difficulties in obtaining funding, navigating biased regulations, limited networking opportunities, and unequal market access (Bates, Farhat, and Casey 2022). These challenges may hinder minority-owned businesses from establishing and leveraging social capital in the same manner as businesses from non-minority backgrounds.

This implies that Asian businesses operate within a complex interplay of factors encompassing their immigrant status, minority identity, and specific Asian cultural experiences and values and that these elements may collectively shape their approach to leveraging social capital. By examining Asian businesses, this research draws from and contributes to the development of nuanced insights into the use of social capital by minority, immigrant, and Asian small business recovery.

Ethnic Social Capital: Forms and Debates

Ethnic social capital, as defined by Light and Gold (2000), encompasses the interactions within ethnic networks that influence individual behaviors, either enabling or constraining them. It encompasses the benefits derived from group attributes within these networks, termed as ethnic resources. This form of capital influences the economic activities of immigrants by offering access to information, training, and credit that might not otherwise be accessible (Levanon 2011). These resources include cultural norms that promote economic advancement, known as ethnic cultural capital, which encompasses specific skills, perspectives, and modes of interaction within the ethnic community. Table 2 presents that there are six that distinct forms of ethnic social capital in use by immigrant, and by extension Asian businesses based on shared cultural values within immigrant context (Cope, Jack, and Rose 2007).

Table 2.

Forms of Ethnic Social Capital Used by Asian Businesses.

Type	Definition
Rotating Credit Associations (RCAs) (Light, Kwuon, and Zhong 1990)	RCAs are typically formed by groups sharing a common background and facilitate close relationships among members, enabling them to overcome financial constraints and venture into entrepreneurial endeavors
Protected market (Bate and Dunham 1993)	Protected markets provide advantages for minority-owned businesses, as devoted customers establish a loyal consumer base driven by the distinct cultural preferences of ethnic communities
Ethnic bank (Nopper 2010)	Ethnic banks provide specialized financial services to specific cultural groups, addressing unique needs and acting as vital bridges between conventional banking and community-specific financial requirements
In-kind support (Waldinger 1986)	In closely-knit ethnic communities, non-monetary support like collaborative labor and rent concessions from landlords, known as in-kind support, serves as valuable social capital for aiding businesses during tough times
Co-ethnic labor access (Bates 1994)	Co-ethnic labor contributes to cultural insights, language proficiency, and a shared heritage, improving customer interactions, building trust, and fostering cooperation for business resilience
Information sharing and networking for recovery aid (Chu and Yang 2020)	Asian immigrant businesses use their cultural background to build strong post-disaster recovery networks, often through platforms like WeChat. This fosters camaraderie, informed decisions, and collective resilience for these businesses

There is also, however, a debate within literature on whether and the extent which the use of these forms of social capital impacts immigrant and minority businesses. Scholars, such as Bates and Dunham (1993) argue that the social capital, particularly the close connections within immigrant communities, may not be a significant factor in the formation or success of small businesses. While previous research has emphasized the importance of supportive relationships among family, peers, and community groups in assisting business creation and operations, Bates and Dunham claim that it is often commercial bank loans that serve as the primary source of debt for financing minority and immigrant small businesses. Furthermore, as this side claims, the success of businesses is not ascribed solely to social capital or networking; it also related to the initial human capital in relation to advanced education and personal wealth. For instance, Young and Sontz (1988) found that Korean greengrocers in New York City achieved greater profitability and cash flow in comparison to their Hispanic counterparts. This disparity in profitability could be attributed to the fact that Korean business practices were primarily driven by profit motives, and these businesses had access to funds from personal wealth and sale of property back Korea. This provided the necessary startup capital for Korean businesses that was absent in the Hispanic community.

On the other side of this debate, scholars like Nopper (2010) and Park (2010) have shown that formation and success of Asian businesses is related to the rise of ethnic commercial banks, as a particular type of social capital. Particularly, Nopper, using the example of Korean American banks, demonstrates how the historical lack of sufficient credit access from non-ethnic banks for minority businesses led to the establishment of ethnic banks. The absence of support from non-ethnic banks compelled Korean entrepreneurs to create their own financial institutions, such as Hanmi Bank, thereby bridging an important credit gap using ethnic connections. Similarly, Park (2010) describes how the popularity of the post-1992 Los Angeles Civil Unrest disaster loan among immigrant businesses was mediated through the presence of Korean American banks. Through specialization in small business loans and active participation in the SBA Loan Program, Korean American banks acted as powerful conduits of social capital and through this, effectively facilitated the growth of co-ethnic businesses as well as fostered a closer relationship between federal agencies and the local immigrant business community. These studies highlight the ways in which social capital may be used by immigrant and minority-owned businesses to overcome barriers and access resources required for their continued operation after disasters.

Research Questions

This study aims to contribute to a better understanding of social capital in Asian businesses by exploring the following research questions. By delving into the experiences of Asian/immigrant businesses in Chinatown, Manhattan, and NYC, we aim to identify key factors, challenges, and strategies that can inform more targeted and hypothesis-driven investigations in the realm of minority business recovery.

What were the recovery journeys of Asian businesses following the COVID-19 pandemic? This inquiry delves into the distinctive paths of Asian business recovery as minority enterprises and explores how COVID-19 influences business strategies rooted in Asian identity.

How do intersecting identities (immigrant status, minority background, and Asian identity) influence Asian business recovery? This question examines how social identities influence the social networking process during the recovery phase. It seeks to understand how these identities impact the formation and usage of social networks in their recovery efforts.

How significant is ethnic social capital in Asian businesses especially under COVID-19 experience? This question explores the impact derived from social capital within the Asian community, specifically in uncertain recovery conditions, and investigates their role in promoting resilience, information sharing, access to resources, and other forms of support.

Data and Methods

Case Study

This study focuses on Asian businesses in Chinatown, located in the borough of Manhattan in New York City. According to the 2019 Annual Business Survey (ABS), approximately 577,835 employees are engaged in Asian businesses across the nation, with nearly 23 percent of these businesses situated in New York City (Dvorkin, Davis, and Gallagher 2020). This information adds significance to the case study by highlighting the economic vitality and tenacity of Asian businesses in the face of diverse challenges.

From a disaster perspective, New York City was recognized as a pandemic hotspot during the outbreak of COVID-19 (McKinley 2022), while also being a pioneering city in the formulation of resilience-oriented policies (Chandrasekhar et al. 2019). Given its central location in Manhattan, Chinatown likely encountered significant challenges during the pandemic (Hartke 2022). This contextual backdrop enables a comprehensive exploration of the resilience exhibited by Asian businesses within a specific neighborhood in the aftermath of a disaster scenario.

Moreover, this case study not only enables a more thorough examination of the unique experiences of particular ethnic groups (Asian), which may not be fully represented in broader studies on business recovery but also offers valuable insights for both the local community and the broader understanding of how small businesses react to and recover from crises. These insights may be applicable to other minority groups of businesses.

Data Collection and Methods

Interview sampling and data procedures

The lead author conducted semi-structured and open-ended key informant interviews with twenty-three Asian business owners in October 2022. The interviews were recorded and were conducted in person, and the average duration was thirty-five minutes. A snowball sampling method was employed, whereby participants were referred by existing interviewees. The interviews focused on several key topics, including the business profile and history; the use of culture and ethnic networks for obtaining recovery resources; changes in these connections and social networking during the recovery process; the adaptation of business operations in response to recovery conditions; and the challenges faced in navigating the recovery process. Informed consent was obtained from all participants, following approval by the Institutional Review Board (IRB). Information about the demographics of participants is located in Table 3.

Table 3.

Participant Demographics.

Immigrant statue	(N = 23)	%
Asian American	15	65
Asian immigrant	8	35
Ethnicity
Chinese	12	52
Korean	3	13
Vietnamese	2	8
Japanese	1	4
Hong Kong	1	4
Thai	1	4
Malaysian	1	4
Burmese	1	4
Taiwanese	1	4
Age
21–30	6	26
31–40	6	26
41–50	4	17
51–60	2	9
61–70	5	22
Years of operation for business
1–4 years	9	39
5–10 years	4	17
11–20 years	3	13
More than 20 years	7	30

Content analysis

The collected data underwent a two-step thematic content analysis using the Atlas.ti software. To ensure credibility and accuracy, codebooks were used to identify codable moments, allowing for reflection on relationships and themes and accurately representing the participants’ voices and perspectives (Lincoln and Guba 1985; Marshall 1990). In the first step, the interview data were carefully scanned to identify significant passages of text, referred to as “codable moments,” which captured the researchers’ attention. Initial codebooks were created based on literature review themes discussed previously. In the second step, extracted text was coded to identify and any new themes that emerged from the data but had not been initially included in the codebooks. This iterative process allowed for the updating of the coding book after each coding activity.

Researchers classified situations as examples of “intersectionality” to encompass instances where business owners referred to small-scale enterprises, minority ownership, immigrant status, and Asian businesses during the interviews. In addition, researchers categorized contexts representing the “utilization of social capital” to capture moments where business owners mentioned recovery activities or resources. For example, according to the definition of social capital outlined in Table 1, expressions like “family support” and “close friend support” were categorized within the bonding social capital category. Similarly, terms, such as “community” and “Chinatown-based organization” were placed under the bridging social capital category, while phrases like “PPP loan” and “traditional bank” were assigned to the linking social capital category.

Data validity

Several strategies were employed during the data collection and analysis processes to enhance the trustworthiness of the research findings (Whittemore, Chase, and Mandle 2001). To ensure authenticity and inclusivity, the interviewees were diverse, representing various Asian backgrounds, capturing nuanced and inclusive perspectives within the Asian community (Lincoln 1995). Critical appraisal was conducted through techniques, such as the coding process, memoing, and writing an interim report, providing evidence of critical thinking and analysis throughout the research process (Whittemore, Chase, and Mandle 2001).

We acknowledged the unique perspective of the lead author, who was an international student from South Korea, and second author is an Asian Immigrant American, considering how this background may influence data interpretation. Rigorous scientific processes, including recursive and repetitive checks of interpretations, were used to mitigate potential biases (Johnson 1999). Through inter-coder reliability analysis, we evaluated the agreement among different coders, ensuring the robustness and reliability of the findings. Adhering to these trustworthiness criteria aimed to uphold the credibility, authenticity, and reliability of the qualitative research findings. This comprehensive approach strengthens confidence in the results and contributes to the overall robustness of the study.

In addition, we acknowledge that the use of snowball sampling may introduce potential bias. In this case study, specifically, network bias could emerge due to the usage of snowball sampling, as the sample becomes concentrated within specific business communities. This could result in the exclusion of individuals who are not well-connected or have limited access to those networks.

Results

This section elucidates the findings of the pandemic’s impact on businesses of different statuses, recovery strategies employed by Asian and immigrant businesses during the COVID-19 crisis, and the usage of ethnic social capital by Asian businesses throughout the pandemic.

Pandemic Impact by Business Status

Thematic coding revealed that the pandemic’s impact on Chinatown businesses mirrored the effects experienced by other small businesses nationwide. This included financial strain from closures and reduced profitability, with added costs for safety measures upon reopening. These measures led to reduced capacity, customer loss, staff reductions, and limited hours, contributing to financial challenges. Changing consumer behavior, marked by declining spending due to increased caution and price sensitivity, further compounded the difficulties faced by these businesses.

Regarding the pandemic’s impact on Asian businesses, the study participants reported that Asian-hate blame led to discrimination against Asian Americans, adversely affecting the community and its businesses. In the context of Chinatown, Manhattan, a well-known area for tourism and restaurants, most businesses reported an overall reduction in travelers visiting New York City due to virus-related fears, subsequently decreasing demand for businesses in this popular tourist destination. Businesses that relied on customer traffic during cultural events like Chinese New Year were particularly impacted, as these events traditionally drew significant numbers of visitors. As a result, the majority of businesses have continued to experience revenue decline since 2020, and they have had to adapt their operations to account for changing travel behaviors among customers. One Chinese American business owner shared their experience regarding this, saying,

For sure some people don’t come down. (. . .) That has nothing to do with us per se. [It] is just because of COVID. It just changed their lifestyle. For example, Chinese New Year, the Lunar New Year . . . every year they would come for sure without a hitch. But then because of COVID, they don’t come to New York anymore. If they’re coming from, I remember, for example, one of my customers (said) “Oh, my husband doesn’t want me to come out, and if this is not what we he wants me to do . . . he’s very upset when I leave town.”

While the proactive stance of most Asian American businesses is evident in their active pursuit of government funding resources, leveraging their language skills and American education, a contrasting narrative emerges among certain Asian immigrant businesses. These businesses grapple with challenges emanating from constrained resources and hurdles in accessing support. For instance, immigrant proprietors indicated ineligibility for the PPP loan due to factors like an absence of credit history or recent business establishment during the pandemic. The restaurant industry, in particular, encountered significant challenges, with numerous immigrant-owned establishments failing to fulfill the requirements for PPP loans due to insufficient staff or the absence of a registered tax identification number. Adding complexity to this picture, a distinctive sentiment emerged among immigrant business owners—a sentiment characterized by skepticism and mistrust toward the government’s commitment to assisting marginalized communities. Their apprehensions stem from concerns that accepting aid might lead to unforeseen future costs. For example, one immigrant business owner said,

No, we just refuse to believe that they would give free money because, I guess, as someone that’s part of a marginalized community, you aren’t used to receiving any help from the government. You’re sort of . . . it’s like a psychological thing. You just refuse to believe that the government would be there to help you.

Paradoxically, the pandemic had also ushered in unforeseen opportunities for immigrant businesses. Amid the closures of other businesses, certain businesses of immigrant ownership seized the moment by capitalizing on reduced equipment prices. Moreover, young immigrant entrepreneurs harnessed the initial drop in Manhattan’s rent prices, using the accessible environment to initiate their own ventures. This seemingly contradictory scenario, where economic challenges coincided with entrepreneurial openings, fostered the emergence of new businesses despite the daunting circumstances posed by the pandemic.

Asian and Immigrant Business Resilience Strategies during the COVID-19 Crisis

The business owners’ diverse responses underscore the complex interplay between cultural values, community connections, and individual perceptions in navigating challenging circumstances. More than half of business owners, regardless of age, gender, and status, underscore their Asian identity, fostering heightened community bonding and solidarity in Chinatown. Family support serves as a form of bonding social capital, endowing resilience and crisis management skills drawn from their Asian immigrant heritage. For some participants, the influence of hard work instilled by immigrant parents, the survival mentality of immigrants and strong support systems within this group appears to have played a pivotal role in their weathering the pandemic. This is exemplified by some study participant’s belief in their own resilience. For example, one participant said:

I do believe that my Asian heritage helps me persevere. (. . .) I think part of it is not only that, but it’s part of my family is 1st immigrant (generation), you know. Watching them work hard as all immigrants, my parents are immigrants. (. . .) So that helped me forms my work ethic if you will. So, I think being surrounded by that people know, it definitely helps (go through pandemic crisis).

while another said:

[My father] lived in a time when it was all about survival. Right, like he was an immigrant. He literally had to escape a war. And live in a refugee camp. (. . .) Ever since he was a child, he had this survival mentality. (. . .) The fact that our family is pretty close, you know like I think. Having a good support system is really important for coming out of any sort of hard time.

Most interviewed businesses highlighted bridging social capital at the community level, showcasing increased empathy and mutual support among locals. Emerging community-based organizations offered assistance post-COVID-19, with mutual support leading to a positive, supportive atmosphere. Participants reported that donated funds were used to buy meals from local businesses and aid the homeless or elderly, fostering a supportive ecosystem where contributions fuel increased community and external funding.

There is [a new community organization started] by two girls who were in a sorority together and they live in the neighborhood, and they wanted to help everybody. So the co-founder, she reached out to me first (. . .) they were funded from community donations and they were like, “Hey, can I buy 200 meals from you guys?” Things to feed the homeless or feed the elderly, and that’s how they started giving business hope to all these Chinatown businesses too.

However, cultural background and sensitivity did not always serve to enhance social capital among Asian businesses. Certain business owners, regardless of age, were less open to discussing their personal hardships within their community because of cultural sensitivities. Some study participants also claimed that norms of pride and shame in some Asian communities discourage open discussion of difficulties, which can also hinder access to aid despite the need for it:

For cultural sensitivities, I’ll even use my own experience or growing up as a Chinese American woman and 2nd generation in that. It’s a lot about, I think pride and shame and not kind of openly discussing your hardships because it’s like, those are your hardships and that it isn’t a burden for other people. Or it’s also, like dirty laundry, kind of. It’s that mentality.

Ethnic Social Capital within Asian Businesses

In-kind supports and information sharing

Most businesses interviewed reported receiving increased in-kind support from the local community due to their strong sense of belonging as Asians and immigrants. For example, some business owners mentioned that their landlords, who were also older immigrants from Asia, displayed understanding and empathy toward the challenges faced by immigrant-owned businesses. This understanding likely stemmed from the landlords’ own experiences as migrants. This empathy and shared background led to more lenient and supportive actions from the landlords, such as offering flexibility with rent payments or other forms of assistance. The in-kind support reflects the cohesive community ties within Chinatown, where individuals with similar backgrounds and experiences feel a sense of solidarity and mutual aid. This support could be crucial in helping businesses weather the challenges brought on by the pandemic or other difficulties.

I’m not qualifying for that [PPP Loan], but my landlord, like, understands a lot of things since he is also kind of an immigrant from Hong Kong, [he moved] in 80s. Because of that he understands a lot of things.

In terms of information sharing, while some business owners reported receiving assistance from their accountants or banks, they said they learned about the PPP loan and other grant opportunities through the Chinatown community. The following quote from a business owner highlights the trust and cooperation present within co-ethnic communities and showcases the value of co-ethnic support networks:

I think we obtained (the PPP loan) from some banks and some from our accountant. But we were informed about it through the community. We received the information about the program from the community, and then we sought further guidance from our accountant to apply.

Protected market and co-ethnic labor access

Within the confines of Chinatown, Asian businesses benefit significantly from a robust base of loyal customers emanating from the Asian community. This clientele’s deep-seated cultural affinity and trust toward businesses owned by individuals of the same ethnic background compel them to prioritize co-ethnic establishments over others. One business owners stated:

So our store is right in the heart of Chinatown. We know a lot of the restaurant owners now. We know a lot of the customers, like the people that live around, like the aunties and uncles, the grandmas and grandpas. We know everybody and they know of us and help us. [Author note: In some Asian cultures, all older males and females within one’s ethnic communities are referred to as “uncle” and “aunty” regardless of kinship]

In terms of co-ethnic labor access, we observed that some business owners experienced continued support from their employees, who chose to stay and assist the business during challenging times. This loyalty and dedication were attributed to a strong sense of ethnic co-identity and mutual understanding between the employees and business owners, which has been shown to foster cohesive and supportive work environments (Bates 1994). However, what stands out in this study is the proactive approach taken by business owners to retain their co-ethnic workers. Despite the uncertainties brought on by the pandemic, the owners showed a deep commitment to protecting their co-ethnic workers’ livelihoods. For instance, one business owner stated:

We were planning to use personal funds [for our employee], but that was before PPP came out. As soon as the lockdown mandate was issued, we were uncertain if we would have to close down, so my husband said, ‘We will take care of Jane. Jane is our main employee, [an] Asian immigrant. We decided that if we had to close down because of the city mandate, we would continue to pay Jane no matter what, so she could survive, pay rent, and cover her bills. [Author note: Employee name has been changed to protect confidentiality]

However, there were also business owners who did not exclusively identify with the Asian ethnicity. They spoke about the inclusive nature of New York City and how it accommodates a diverse array of ethnicities and backgrounds. For them, the concept of the protected market extended beyond the confines of a specific ethnic group and transcended cultural stereotypes. They emphasized that helpfulness and supportiveness should not be restricted to any particular ethnicity; rather, it should be a universal human value. As this quote suggests, some participants felt that the pandemic had brought people together regardless of ethnicity and had united communities in times of crisis:

Um, and there are all kind of great generous, and kind people out there, and I don’t really level them as “Asian” or anything, but “New Yorkers.”

Rotating Credit Associations

Although the study did not explicitly identify Rotating Credit Associations (RCAs) as a significant factor in immigrant businesses, there are compelling indications that informal financial arrangements similar to RCAs could be at play. Several interviewed business owners emphasized support from the Korean American community, leading to a cycle where the money spent by community members is continually circulated within their community. They mentioned associations like churches and trade organizations, where businesses come together to help each other financially. One business owner stated:

Especially Korean American, when one business needs money, there is always an association with the Korean community, like the churches, the trade associations, even among themselves, they like to help each other, you know.

These informal financial networks bear striking similarities to the principles of RCAs, where individuals pool their resources and take turns receiving lump-sum payments. While the term “RCAs” was not explicitly used by study participants, the essence of mutual financial assistance and continual money circulation within the community aligns closely with the concept of RCAs.

Discussion

This study aims to comprehend the role of ethnic social capital, specifically by investigating the recovery of Asian businesses in Manhattan’s Chinatown after COVID-19. The objective is to provide insights for planners to design tailored business assistance programs for post-disaster economic recovery. While the existing literature underscores the importance of social capital in minority community recovery and its association with resilience, there has been limited exploration of the role played by social capital developed within specific ethnic groups and how its components influence the recovery strategies of ethnic groups. Furthermore, the existing literature has overlooked the significance of intersecting identities that minority groups might possess, which has become crucial in comprehensive post-disaster recovery planning.

This study contributes to the literature by investigating the dynamic facets of social capital within ethnic contexts, surpassing conventional categories for social capital like bonding, bridging, and linking. It also identifies specific challenges arising from intersecting identities, highlighting the limitations of a one-size-fits-all approach to disaster recovery assistance. It employs in-depth interview methods with Asian business owners to gain a deeper understanding of their experiences. The findings provide valuable evidence that illuminates the intricate dynamics of social capital and its impact on post-disaster recovery in this ethnic business community.

First, over half of the business owners in this study, irrespective of age, gender, or status, emphasized their Asian identity and viewed Asian immigrant resilience as well as the supportive community in Chinatown as critical factors for their businesses survival. Their experiences of effectively managing and adapting to crises as a cultural community appeared to heighten their resilience against the challenges of COVID-19. However, certain cultural aspects rooted in their Asian heritage, such as reluctance to seek external aid and cultural sensitivities had also led to hesitancy in sharing hardships, therefore hindering access to resources that may have been available through social networks.

Second, while prior literature suggests that businesses receive significant support from co-ethnic employees who continue to assist during challenging periods, this study shows that a reciprocal relationship also exists, in which businesses take extra measures to retain and support their co-ethnic workforce. Despite the uncertainties imposed by the pandemic, the owners demonstrated a profound commitment to safeguarding the livelihoods of their co-ethnic workers.

Finally, although there was no direct evidence of RCAs existing or being used as formal aid sources in this study, reports of similar sounding practices within some Asian groups imply that social capital may still be playing a role in access to financial aid. More in-depth research into these informal financial arrangements is needed in order to conclude whether specific Asian sub-communities are using RCAs or similar mechanisms to support their recovery.

Limitations of the Study

The findings of this study are limited by some aspects of its research design and data collection. First, many of the interviewees who were business owners in Chinatown belonged to the second or third generation of immigrants, had been immersed in U.S. culture since an early age, and oftentimes identified themselves equally as “New Yorkers.” This may have affected the diversity of cultural experiences and resources that study participants used for their recovery. An expansion of this study to other cultural districts that are less historically established may help to counter this limitation of study results.

Second, businesses in Chinatown, Manhattan are involved in globalized business practices, catering not only to Asian community but also to tourists from various parts of the world. The neighborhood’s dynamics are influenced by interactions with diverse ethnicities surrounding Chinatown, including non-minority cultures. It is possible that the context in which Chinatown businesses operate has affected the use of (or non-use) of social–capital-specific recovery strategies that may be observed in a more ethnic enclave setting.

Conclusions and Implications for Planning Practice

This study began by identifying the deficiencies in traditional adaptation strategies for disaster recovery, particularly in addressing the pandemic’s aftermath for racial groups with restricted access to recovery aid. It is imperative for planners to rectify historical injustices, confront current challenges, and implement robust future safeguards.

Asian businesses faced considerable challenges, such as xenophobia, racial harassment, and stigma associated with COVID-19 (Ong, Zhang, and Shaw 2021). Nevertheless, these adversities also present opportunities for innovation and community solidarity. By leveraging community networks and cultural strengths, these businesses can not only endure but also prosper.

While existing research has examined ethnic social capital, this study addresses a critical gap by exploring its essential role in disaster recovery for Asian and immigrant businesses. Traditional forms of business social capital—bonding, bridging, and linking—are insufficient in supporting minority-owned businesses in the post-pandemic context.

This highlights the urgent need for planners to revise historical practices, address contemporary challenges, and establish future safeguards. Planners must acknowledge and accommodate the diverse identities and cultural sensitivities within Asian communities, particularly in areas like Chinatown, which encompass a variety of business types, including Asian American/Asian, immigrant-, women-, and family-owned enterprises. During the pandemic recovery, some ethnic social capital within Asian businesses emerged as vital. In-kind support and information sharing, along with access to protected markets and co-ethnic labor, played crucial roles in the recovery of Asian businesses. The significant impact of the pandemic on these businesses necessitates a tailored approach.

Ensuring equitable distribution of recovery aid is crucial. Planners should adopt inclusive strategies that facilitate access to assistance for all businesses, irrespective of their specific status. For instance, business relief funds should include provisions for recent immigrant-owned startups, businesses with limited credit history, and those with few employees. Recognizing and accommodating this diversity is essential for effective and inclusive recovery planning.

Finally, planners should enhance disaster preparedness by leveraging ethnic social capital networks and deploying community “navigators” for outreach. These navigators, equipped with specialized cultural knowledge, can bridge communication gaps and foster trust within ethnic communities. This approach will promote greater community engagement and facilitate more effective recovery planning.

Footnotes

Acknowledgements

The authors acknowledge with appreciation the support provided by Dr. Vivian Shaw and Dr. Christina Ong from the AAPI COVID-19 Project team for this research. Their contributions have been essential in facilitating field trips to NYC to collect business interviews.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Sua Kim

Author Biographies

Sua Kim is a postdoctoral scholar in the School of Public Policy at the University of California, Riverside. Her research interests lie in local economic development with a focus on historically underrepresented groups in business.

Divya Chandrasekhar is an Associate Professor in the Department of City & Metropolitan Planning at the University of Utah. Her research focus is community recovery after disasters.

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