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Reconceptualizing the Enclave: Measuring Success Among Latino‐Owned Businesses
Author(s) -
Orozco Marlene
Publication year - 2020
Publication title -
social science quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.482
H-Index - 90
eISSN - 1540-6237
pISSN - 0038-4941
DOI - 10.1111/ssqu.12821
Subject(s) - leverage (statistics) , ethnic group , profitability index , revenue , business , marketing , sample (material) , demographic economics , economics , sociology , finance , chemistry , chromatography , machine learning , computer science , anthropology
Objective This study considers whether ethnic economy characteristics, such as serving a primarily co‐ethnic customer base or having a business located among co‐ethnics (i.e., enclaves), promote greater success for Latino‐owned businesses. Previous studies offer unclear accounts of how the enclave is measured and have suffered from issues of selection bias. I validate spatial measures with additional measures related to ethnic economies. Methods Rather than starting with a predetermined geographic location, I leverage a national business sample, the 2018 Survey of U.S. Latino Business Owners ( N = 4,024), to estimate an ordered logistic regression that predicts the successful characteristics of the economic niche under which Latino‐owned businesses operate. Results I find Latino‐owned businesses have the greatest profitability selling Latino products but see the greatest revenue returns serving mostly non‐Latino customers. I uncover the largest effect sizes among Latino‐owned businesses that mainly employ co‐ethnics rather than among businesses located within a defined geography. Conclusion These findings suggest ethnic economies are not geographically bounded, as previously theorized, but rather culturally based.