Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States
AbstractUsing confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear 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. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors.
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Bibliographic InfoPaper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 06-32.
Length: 58 pages
Date of creation: Dec 2006
Date of revision:
Other versions of this item:
- Alicia M. Robb & Robert W. Fairlie, 2008. "Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States," CEPR Discussion Papers 569, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Robb, Alicia & Fairlie, Robert W., 2007. "Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States," IZA Discussion Papers 2566, Institute for the Study of Labor (IZA).
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, and Immigrants; Non-labor Discrimination
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-24 (All new papers)
- NEP-ENT-2007-02-24 (Entrepreneurship)
- NEP-SEA-2007-02-24 (South East Asia)
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