Measuring Success Among Latino-owned Businesses

A paper published in Social Science Quarterly that revisits sociological theories on enclave economies.

Objective. This study considers whether ethnic economy characteristics, such as serving a primarily co-ethnic customer base or having a business located among co-ethnics (i.e., enclaves), promote greater success for Latino-owned businesses. Previous studies offer unclear accounts of how the enclave is measured and have suffered from issues of selection bias. I validate spatial measures with additional measures related to ethnic economies. Methods. Rather than starting with a pre- determined geographic location, I leverage a national business sample, the 2018 Survey of U.S. successful characteristics of the economic niche under which Latino-owned businesses operate. Latino Business Owners (N= 4,024), to estimate an ordered logistic regression that predicts the Results. I find Latino-owned businesses have the greatest profitability selling Latino products but see the greatest revenue returns serving mostly non-Latino customers. I uncover the largest effect sizes among Latino-owned businesses that mainly employ co-ethnics rather than among businesses located within a defined geography. Conclusion. These findings suggest ethnic economies are not geographically bounded, as previously theorized, but rather culturally based.

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