Abstract
This study illustrates that the entrepreneurs operating underground banks responded to market opportunities arising out of the needs of a specific ethnic group of illegal immigrants. However, the avail-able information leaves other puzzling questions unanswered. Data derived from this research show that underground banking opera-tions rarely extended to customers beyond their co-ethnic group members and generally remained in a clearly defined, geographi-cally circumscribed area – the Fujianese settlements in Chinatown, NYC, and Philadelphia. These attributes of underground banks do not seem compatible with the principle of profit maximization and market expansion. A plausible explanation for this finding is the role of ethnic trust. However, how ethnic trust governs the transactions of underground banks and interactions between operators and their clients is not clear.
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