What metropolitan-level factors affect Latino-owned business performance?

Abstract

An estimated 1.54 million Latinos are self-employed in unincorporated businesses, while the 2012 national Survey of Business Owners counted 3.3 million Latino-owned firms, with a total of $474 million in annual sales or receipts. This entrepreneurship is all the more remarkable given that Latinos traditionally begin their businesses with lower levels of personal capital and have historically had more difficulty obtaining formal startup capital from third parties such as banks or government agencies. While this observation holds true at the national level, different metropolitan areas may provide business environments more or less hospitable to Latino-owned businesses, due to such factors as industry mix, availability of financing, demographics, and local political expression of “welcoming” or anti-immigrant sentiment. This dissertation examines the question of what metropolitan-level factors affect Latino-owned business formation and performance. It finds that Latino entrepreneurs nationwide face persistent obstacles in the form of obtaining financing for both new and existing businesses, which can be addressed at the local level. However, certain concepts currently prominent in research about ethnic entrepreneurs, such as the makeup and geographic concentration of the “ethnic enclave” and the importance of prior history of immigrant settlement in the metropolitan area, may be less applicable to Latinos who come from a broader range of countries and settle in less dense metropolitan areas.