Financing Small Business Creation: The Case of Chinese and Korean Immigrant Entrepreneurs
AbstractPrevailing scholarly literature misrepresents the realities of how immigrant Korean and Chinese entrepreneurs finance entry into small business. Supportive peer and community subgroups are not major sources of startup capital; the majority of all loan funds are raised by borrowing from financial institutions. The major single funding source is equity capital, which derives almost entirely from family household wealth holdings. Controlling for firm and owner traits, comparison groups of nonminority and Asian American nonimmigrant self-employed borrowers are shown to have greater access to loan sources than Korean and Chinese immigrants. High equity capital investment offsets this disadvantage. Absent rotating credit associations, and other minor debt sources, the average Korean/Chinese startup possesses substantially more financial capital than its nonminority counterparts.
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Bibliographic InfoPaper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 96-9.
Date of creation: Sep 1996
Date of revision:
CES; economic; research; micro; data; microdata; chief; economist;
Other versions of this item:
- Bates, Timothy, 1997. "Financing small business creation: The case of Chinese and Korean immigrant entrepreneurs," Journal of Business Venturing, Elsevier, vol. 12(2), pages 109-124, March.
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