IDEAS home Printed from https://ideas.repec.org/p/auu/dpaper/569.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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.

Suggested Citation

  • 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.
    • Handle: RePEc:auu:dpaper:569
    as

    Download full text from publisher

    File URL: https://www.cbe.anu.edu.au/researchpapers/CEPR/DP569.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Timothy Bates & Robert McGuckin, 1990. "The Characteristics of Business Owners Data Base," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 736-751.
    2. Michael Hout & Harvey Rosen, 2000. "Self-Employment, Family Background, and Race," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 670-692.
    3. F. L. Jones, 1983. "On Decomposing the Wage Gap: A Critical Comment on Blinder's Method," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 126-130.
    4. Kenneth Clark & Stephen Drinkwater & Derek Leslie, 1998. "Ethnicity and self-employment earnings in Britain 1973-95," Applied Economics Letters, Taylor & Francis Journals, vol. 5(10), pages 631-634.
    5. Kenneth Clark & Stephen Drinkwater, 2002. "Enclaves, neighbourhood effects and employment outcomes: Ethnic minorities in England and Wales," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 5-29.
    6. Henry S. Farber, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," NBER Working Papers 7002, National Bureau of Economic Research, Inc.
    7. Timothy Bates & David Howell, 1998. "The Declining Status of Minorities in the New York City Construction Industry," Economic Development Quarterly, , vol. 12(1), pages 88-100, February.
    8. Robert W. Fairlie & Harry A. Krashinsky, 2012. "Liquidity Constraints, Household Wealth, And Entrepreneurship Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(2), pages 279-306, June.
    9. Fairlie, Robert W, 1999. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 80-108, January.
    10. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    11. Farber, Henry S, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 142-169, October.
    12. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
    13. 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.
    14. 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.
    15. Astebro, Thomas & Bernhardt, Irwin, 2003. "Start-up financing, owner characteristics, and survival," Journal of Economics and Business, Elsevier, vol. 55(4), pages 303-319.
    16. William D. Bradford, 2003. "The Wealth Dynamics of Entrepreneurship for Black and White Families in the U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(1), pages 89-116, March.
    17. Mar, Don, 2005. "Individual characteristics vs. city structural characteristics: explaining self-employment differences among Chinese, Japanese, and Filipinos in the United States," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(3), pages 341-359, May.
    18. Frank Fratoe, 1988. "Social capital of black business owners," The Review of Black Political Economy, Springer;National Economic Association, vol. 16(4), pages 33-50, March.
    19. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632.
    20. 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;National Economic Association, vol. 18(2), pages 25-42, September.
    21. Brian Headd, 1999. "The Characteristics of Business Owners Database, 1992," Working Papers 99-8, Center for Economic Studies, U.S. Census Bureau.
    22. Frank Fratoe, 1986. "A sociological analysis of minority business," The Review of Black Political Economy, Springer;National Economic Association, vol. 15(2), pages 5-29, September.
    23. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-559, November.
    24. Arturs Kalnins & Wilbur Chung, 2006. "Social Capital, Geography, and Survival: Gujarati Immigrant Entrepreneurs in the U.S. Lodging Industry," Management Science, INFORMS, vol. 52(2), pages 233-247, February.
    25. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robert W. Fairlie & Julie Zissimopoulos & Harry Krashinsky, 2010. "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, pages 179-208, National Bureau of Economic Research, Inc.
    2. Sana Ullah & Muhammad Tariq Majeed & Babur Wasim Arif, 2021. "Social capital and firms’ choice of financing under credit constraints: microeconomic evidence from Pakistan," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 48(1), pages 3-13, March.
    3. Ron Jarmin & CJ Krizan & Adela Luque, 2016. "Small Business Growth and Failure during the Great Recession: The Role of House Prices, Race & Gender," CARRA Working Papers 2016-08, Center for Economic Studies, U.S. Census Bureau.
    4. Widad Pitrus*, 2015. "Not all smooth sailing: Barriers to small business success for owner/managers from Middle Eastern communities in Melbourne," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(6), pages 293-304, Special I.
    5. Getahun Fenta Kebede, 2020. "Network Locations or Embedded Resources? The Effects of Entrepreneurs’ Social Networks on Informal Enterprise Performance in Ethiopia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 630-659, June.
    6. Evgueni Vinogradov & Espen J. Isaksen, 2008. "Survival Of New Firms Owned By Natives And Immigrants In Norway," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 13(01), pages 21-38.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    2. Alicia Robb & Robert Fairlie, 2009. "Determinants of business success: an examination of Asian-owned businesses in the USA," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(4), pages 827-858, October.
    3. 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(2), pages 289-323.
    4. Robert W. Fairlie & Julie Zissimopoulos & Harry Krashinsky, 2010. "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, pages 179-208, National Bureau of Economic Research, Inc.
    5. Robert W. Fairlie & Harry Krashinsky & Julie Zissimopoulos & Krishna B. Kumar, 2012. "Indian Entrepreneurial Success in the United States, Canada, and the United Kingdom," Research in Labor Economics, in: Research in Labor Economics, pages 285-318, Emerald Group Publishing Limited.
    6. Robert Fairlie & Alicia Robb, 2009. "Gender differences in business performance: evidence from the Characteristics of Business Owners survey," Small Business Economics, Springer, vol. 33(4), pages 375-395, December.
    7. Alicia M. Robb & Robert W. Fairlie, 2007. "Access to Financial Capital among U.S. Businesses: The Case of African American Firms," The ANNALS of the American Academy of Political and Social Science, , vol. 613(1), pages 47-72, September.
    8. Fairlie, Robert W. & Lofstrom, Magnus, 2013. "Immigration and Entrepreneurship," IZA Discussion Papers 7669, Institute of Labor Economics (IZA).
    9. Robert W. Fairlie, 2004. "Recent Trends in Ethnic and Racial Business Ownership," Small Business Economics, Springer, vol. 23(3), pages 203-218, October.
    10. 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.
    11. Magnus Lofstrom & Timothy Bates, 2013. "African Americans’ pursuit of self-employment," Small Business Economics, Springer, vol. 40(1), pages 73-86, January.
    12. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
    13. Y Georgellis & J G Sessions & N Tsitsianis, 2005. "Self-Employment Longitudinal Dynamics: A Review of the Literature," Economic Issues Journal Articles, Economic Issues, vol. 10(2), pages 51-84, September.
    14. Magnus Lofstrom, 2013. "Does self-employment increase the economic well-being of low-skilled workers?," Small Business Economics, Springer, vol. 40(4), pages 933-952, May.
    15. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
    16. Fairlie, Robert, 2014. "Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners," Santa Cruz Department of Economics, Working Paper Series qt4zb9198n, Department of Economics, UC Santa Cruz.
    17. P. Köllinger & M. Minniti, 2006. "Not for Lack of Trying: American Entrepreneurship in Black and White," Small Business Economics, Springer, vol. 27(1), pages 59-79, August.
    18. Aldén, Lina & Bastani, Spencer & Hammarstedt, Mats & Miao, Chizheng, 2020. "Ethnic Differences in Long-Term Self-Employment," Working Paper Series 1361, Research Institute of Industrial Economics.
    19. Fairlie Robert & Woodruff Christopher M., 2010. "Mexican-American Entrepreneurship," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-44, February.
    20. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.

    More about this item

    Keywords

    Asian; entrepreneurship; business outcomes;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:auu:dpaper:569. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cpanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.