Ethnic groups often remain segregated long after emigrating to a new area. Why, for example, do the Chinese in Southeast Asia and Africa or the Armenians in Russia remain excluded from mainstream business activities? However, ethnic enclaves, perhaps due to business skills passed down from older members of the community, run successful businesses. Is shared ethnicity crucial to building networks and trust, ensuring that business thrives? Research from Columbia University in the United States shows that it is indeed easier for business associates from a similar ethnic background to clinch and stick to a deal: if cheating does occur, the guilty party will suffer social sanction and exclusion not only from their network but the entire ethnic community. If ethnic firms’ advantage is the community how can indigenous firms compete on an equal footing?