Mexican-hipanic self-employment entry : the role of business star-up constraints
By: LOFSTROM, Magnus
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Contributor(s): WANG, Chunbei.
Material type: 
ArticlePublisher: Thousand Oaks : SAGE, September 2007The Annals of the American Academy of Political and Social Science 613, p. 32-46Abstract: This article examines causes of the low self-employment rates among Mexican-Hispanics by studying self-employment entry using the 1996 panel of the Survey of Income and Program Participation (SIPP). The data show that Mexican-Hispanics are less likely to be self-employed or enter self-employment, relative to non-Hispanic whites. The authors analyze self-employment by recognizing heterogeneity in business ownership across industries and show that a classification of firms by human and financial capital "intensiveness," or entry barriers, is effective in explaining differences in entrepreneurship across ethnic groups. The authors show that the lower self-employment entry rates among Mexican-Hispanics are due to lower entry rates into business ownership of firms in relatively high-barrier industries. In fact, Hispanics are more likely to start up a business in a low-barrier industry than whites.
This article examines causes of the low self-employment rates among Mexican-Hispanics by studying self-employment entry using the 1996 panel of the Survey of Income and Program Participation (SIPP). The data show that Mexican-Hispanics are less likely to be self-employed or enter self-employment, relative to non-Hispanic whites. The authors analyze self-employment by recognizing heterogeneity in business ownership across industries and show that a classification of firms by human and financial capital "intensiveness," or entry barriers, is effective in explaining differences in entrepreneurship across ethnic groups. The authors show that the lower self-employment entry rates among Mexican-Hispanics are due to lower entry rates into business ownership of firms in relatively high-barrier industries. In fact, Hispanics are more likely to start up a business in a low-barrier industry than whites.
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