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Ethnic diversity and small business venturing

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  • Christopher J. Boudreaux

    (Florida Atlantic University)

Abstract

While researchers have examined how ethnic diversity affects regional organizational performance, little research has been done to examine how ethnic diversity affects the creation of firm establishments for different sized firms. By generating additional market segments, in addition to fostering supply-side effects, we propose that a region’s ethnic diversity fosters an environment that is conducive to the growth of small firm establishments but not medium- or large-sized establishments. Using county-level data on US firm establishments and ethnic diversity, we find that a one standard deviation increase in ethnic diversity is associated with a 6 to 8% increase in the number of small firm establishments and a 26–28% decrease in the number of large-sized firm establishments.

Suggested Citation

  • Christopher J. Boudreaux, 2020. "Ethnic diversity and small business venturing," Small Business Economics, Springer, vol. 54(1), pages 25-41, January.
    • Handle: RePEc:kap:sbusec:v:54:y:2020:i:1:d:10.1007_s11187-018-0087-4
    DOI: 10.1007/s11187-018-0087-4
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    Cited by:

    1. Yoon, Hyungseok (David) & Boudreaux, Christopher & Kim, Namil, 2024. "Connecting the dots between democracy and innovation: The role of pro-market institutions and information processing," Research Policy, Elsevier, vol. 53(8).
    2. Isil R. Yavuz & Berrak Bahadir, 2021. "Remittances, Ethnic Diversity, and Entrepreneurship in Developing Countries," Working Papers 2110, Florida International University, Department of Economics.
    3. Rogneda I. Vasilyeva & Ekaterina A. Rozhina, 2022. "Econometric Modeling of the Impact of Ethnic Diversity on Economic Diversification: Analysis of Russian Regions," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(4), pages 663-684.
    4. R. Isil Yavuz & Berrak Bahadir, 2022. "Remittances, ethnic diversity, and entrepreneurship in developing countries," Small Business Economics, Springer, vol. 58(4), pages 1931-1952, April.
    5. Wise, Sean & Yeganegi, Sepideh & Laplume, André O., 2022. "Startup team ethnic diversity and investment capital raised," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    6. Lucas, David S. & Boudreaux, Christopher J., 2020. "National regulation, state-level policy, and local job creation in the United States: A multilevel perspective," Research Policy, Elsevier, vol. 49(4).

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    More about this item

    Keywords

    Small business venturing; Ethnic diversity; Entrepreneurship;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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