HCBE Faculty Articles

Title

Enclaves and Entrepreneurial Success

Document Type

Article

Date

2014

Publication Title

Journal of Entrepreneurship and Public Policy

ISSN or ISBN

2045-2101

Volume

3

Issue

2

First Page

197

Last Page

221

Description

Purpose

– The purpose of this paper is to examine the effect of immigrant and ethnic enclaves on the success of entrepreneurial ventures as measured by firm profits and viability.

Design/methodology/approach

– Data on entrepreneurs and their new firms were provided by the Kauffman Foundation and covered the years 2004-2008. These firm-level data were linked to Census 2000 Summary Files at the ZIP Code level and were used to empirically investigate the effect of enclaves.

Findings

– The paper found a statistically significant negative effect of immigrant representation in an area on firm profitability. This effect operated on native, rather than immigrant, firm owners, which suggested that native-owned firms locating in immigrant enclaves may experience difficulty assimilating the benefits that enclaves offer.

Practical implications

– Cultural connections within local communities play a key role in the success of new businesses. Potential firms should recognize the importance of these connections when making firm location decisions. Likewise, the findings suggest that connections within local communities should be considered when designing aid programs.

Originality/value

– The authors used a unique measure of enclave representation to incorporate both immigrant, as well as ethnic, representation in the local area. The authors examined the effect of immigration on both immigrant- and native-owned firms in order to provide a broader scope and a more complete understanding of the effects of immigration on entrepreneurial ventures.

DOI

10.1108/JEPP-08-2012-0039

This document is currently not available here.

Peer Reviewed

Find in your library

Share

COinS