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Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States

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Author Info
Alicia M. Robb
Robert W. Fairlie
Abstract

Using confidential microdata from the U.S. Census Bureau, we investigate the performance of Asian-owned businesses. Using regression estimates and a special nonlinear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than white-owned businesses for two main reasons – Asian owners have high levels of human capital and their businesses have substantial startup capital. Using detailed information on both the owner and the firm, we estimate the explanatory power of several additional factors. This research was partially funded by the Russell Sage Foundation and Kauffman Foundation. The research in this paper was conducted while the authors were Special Sworn Status researchers of the U.S. Census Bureau at the Center for Economic Studies and California Research Data Center at U.C. Berkeley. This paper has been screened to insure that no confidential data are revealed. The data can be obtained at a Census Research Data Center or at the Center for Economic Studies (CES) only after approval by the CES and IRS. See www.ces.census.gov for details on the application and approval process. The views expressed here are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Russell Sage Foundation, the Kauffman Foundation, the U.S. Census Bureau, or the Board of Governors of the Federal Reserve System.

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Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, Australian National University in its series CEPR Discussion Papers with number 569.

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Date of creation: Feb 2008
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Handle: RePEc:auu:dpaper:569

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Related research
Keywords: Asian; entrepreneurship; business outcomes;

Find related papers by JEL classification:
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Headd, Brian, 2003. " Redefining Business Success: Distinguishing between Closure and Failure," Small Business Economics, Springer, vol. 21(1), pages 51-61, August. [Downloadable!] (restricted)
  2. Robert W. Fairlie & Alicia M. Robb, 2007. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 289-323. [Downloadable!]
  3. Mar, Don, 2005. "Individual characteristics vs. city structural characteristics: explaining self-employment differences among Chinese, Japanese, and Filipinos in the United States," The Journal of Socio-Economics, Elsevier, vol. 34(3), pages 341-359, May. [Downloadable!] (restricted)
  4. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December. [Downloadable!] (restricted)
  6. Clark, Kenneth & Drinkwater, Stephen, 1998. "Ethnicity and Self-Employment in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(3), pages 383-407, August.
  7. Kenneth Clark & Stephen Drinkwater, 2002. "Enclaves, neighbourhood effects and employment outcomes: Ethnic minorities in England and Wales," Journal of Population Economics, Springer, vol. 15(1), pages 5-29. [Downloadable!] (restricted)
  8. Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September. [Downloadable!] (restricted)
  9. Timothy Bates, 1989. "The changing nature of minority business: A comparative analysis of asian, nonminority, and black-owned businesses," The Review of Black Political Economy, Springer, vol. 18(2), pages 25-42, September. [Downloadable!] (restricted)
  10. Robert W. Fairlie & Harry A. Krashinsky, 2006. "Liquidity Constraints, Household Wealth, and Entrepreneurship Revisited," IZA Discussion Papers 2201, Institute for the Study of Labor (IZA). [Downloadable!]
  11. William D. Bradford, 2003. "The Wealth Dynamics of Entrepreneurship for Black and White Families in the U.S," Review of Income and Wealth, Blackwell Publishing, vol. 49(1), pages 89-116, 03. [Downloadable!] (restricted)
  12. Robert W. Fairlie & Julie Zissimopoulos & Harry Krashinsky, 2008. "The International Asian Business Success Story? A Comparison of Chinese, Indian and Other Asian Businesses in the United States, Canada and United Kingdom," NBER Chapters, in: International Differences in Entrepreneurship National Bureau of Economic Research, Inc. [Downloadable!]
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  1. Robert W. Fairlie & Julie Zissimopoulos & Harry Krashinsky, 2008. "The International Asian Business Success Story? A Comparison of Chinese, Indian and Other Asian Businesses in the United States, Canada and United Kingdom," NBER Chapters, in: International Differences in Entrepreneurship National Bureau of Economic Research, Inc. [Downloadable!]
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