Your Entrepreneurial Ecosystem
Your Entrepreneurial Ecosystem

New Research on the Positive Effects of Latino-owned Businesses!

by

The expansion of ethnic minorities evokes policy debate about their impact on the local economy, driving a need to measure their effects. We employ the confidential US Census data to investigate drivers of local economic performance with emphasis on the role of Latino-owned businesses (LOB) on convergence. The model also includes a number of controls. The model produces direct, indirect, and total impact estimates, and expected values for the non-LOB controls. The estimated total impact of LOB employment on county-level average annual growth rates is significant and positive, but a rurality interaction carries the opposite sign, such that the total impact in rural areas is negative.

Read the full article here: https://link.springer.com/article/10.1007/s00168-019-00942-x

What Factors Cause Latino-owned Business to Survive? New research out

by

This article uses 127,000 observations from three confidential Census microdata sets at theindividual firm and establishment level to investigate Latino-owned business survival. The merged microdataallows us to control for a wide array of personal, business, and regional characteristics. The analysis is basedon hazard model. Relative to base categories, we find the following decrease in the odds of survival: Latina-owned, Puerto Rican owned, and selling to the federal government. Owner education and low barrier sectorshave no effect, while start-up from personal savings increase the odds by 4 percent. The findings informways to expand regional economies through businesses operated by Latinos.

Read more here: https://rrs.scholasticahq.com/article/7933-factors-associated-with-latino-owned-business-survival-in-the-united-states

New Research on Latino-owned Business Growth

by

Here is some new research authored by me. The article uses over 100,000 observations from limited-access and nationally representative US Census Bureau microdata sets to test determinants of employment growth among Latino-owned businesses (LOBs) in the Unites States. We draw variables from prior studies on determinants business growth in the general population and uniquely apply them to LOB using the robust data. Specifically, we examine the impact of numerous business owner, business, and regional characteristics on employment growth. We include industry and state-level fixed effects and test the robustness of results to various employment growth timespans. Some findings include (1) Latina-owned businesses grow faster than LOB, (2) formal education has a positive effect on employment growth and this effect is larger with education level and time, (3) Puerto Rican-owned businesses grow 2 percent slower than Mexican-owned establishments, (4) having multiple establishments reduces employment growth, (5) relying on personal savings for start-up capital impedes growth, and (6) nonmetro adjacency has a significant and negative effect, while population density does not. Our findings show that LOB may grow differently than other businesses and help advance the understanding of factors related to success of LOB. Implementing straightforward and low-cost policies aimed at better support for LOB could help bolster regional growth.

 

Read more at: https://doi.org/10.1177%2F0160017619826278

New Research Article on Differences Between Latino-Owned Businesses and White-, Black-, or Asian-Owned Businesses

by

Growth of the U.S. Latino population translates into policy interest of how business owner, firm, and local characteristics may be different for Latinos. To explore ethnicity and business ownership, this study merges restricted-access data from 11 million businesses. Multinomial logistic regression estimates how characteristics associate with the probability of the business being Latino-owned relative to White-owned, Black-owned, or Asian-owned. There are differences in the source and amount of start-up funds, gender, and the sector of the business. The differences depend on the group to which Latinos are being compared; for example, manufacturing firms are less likely to be Latino owned than White owned, but more likely to be Latino owned than Black owned. An exception is college education and rurality; Latino owners are consistently less likely to be college educated and more likely to locate in rural areas than the other ethnic minorities. The results should be helpful to groups attempting to improve Latino business outcomes.

To read more, read the full article here: http://journals.sagepub.com/doi/full/10.1177/0891242418785466

New Research on Latino Self-Employment

by

My colleague and I employ U.S. Census Bureau data from cities of 10,000 or more to examine the impact of immigrants in American cities on self-employment and median income. The results show that self-employment has a statistically significant and positive impact on median income and immigrant population. When controlling for race populations, lagged immigrant population has a negative impact on self-employment, but removing the Hispanic control causes this relationship to become statistically insignificant. In other words, Hispanics, not other ethnicities, drive much of the self-employment in U.S. cities. An implication is that more attention to helping Hispanic business owners succeed and expand their businesses could benefit the general population of a city.

For more, the full academic journal article is here: http://www.jrap-journal.org/pastvolumes/2010/v47/jrap_v47_n2_a1_carpenter_loveridge.pdf

Hispanic and Latino-owned Businesses Increasingly Important

by

Recent estimates from the U.S. Census Bureau emphasize the importance of Latino-owned business in the United States.

Although Latinos still make up a relatively small share of the total business in the United States, compared to non-Latinos, the number of Latino-owned business is growing relatively quickly. The number of Latino-owned businesses increased by 46.3 percent from 2.3 million to 3.3 million in the five years between 2007 to 2012. The total number of all U.S. firms increased at a relatively the slow rate of 2 percent during the same period, from 27.1 million to 27.6 million. Hence, if not for Latino-owned businesses, the total number of U.S. firms may have decreased over that time period. The Latino-owned business receipt growth rate similarly outpaced that of all firms, with an increase of 35.1 percent from $350.7 to $473.6 billion, compared to 11.7 percent growth from $30.0 to $33.5 trillion for all firms.

Reaching out to your Latino community members when discussing any economic development planning or entrepreneurial gardening is essential. Most importantly, reaching out is essential because you should always be sure to include a diverse and representative group in these efforts to maximize buy-in and productive contributions to the process. But reaching out is also important because failing to make an effort to invite your Latino community members will simply exclude a large portion of your small business owners.

See the link below to read the Census’s post:

http://blogs.census.gov/2016/12/01/hispanic-owned-businesses-on-the-upswing/