Inclusive Entrepreneurship

The Impact of Formality, Integration, and Commitment on the Performance of Latino-Owned Small Businesses

Lead Researchers:

Drew Starbird
Department of Information Systems & Analytics, Santa Clara University

Jill Martin
My Own Business Institute, Santa Clara University

Yacanex Posadas
Yacanex Business Group

Alma Gutiérrez
Yacanex Business Group

Why We Did This Research

Research Overview

This project examines the key factors that drive the performance of Latino-owned small businesses in Silicon Valley. By analysing both owner characteristics and business practices, the study sheds light on how formality, integration, and commitment influence revenue outcomes and long-term sustainability.

Research Question:

The study explores the impact of different business and owner characteristics on the performance of Latino-owned small businesses.

Methodology

The study draws on survey data from more than 200 Latino small business owners in Silicon Valley. Using ordered logistic regression, the research measures the effect of multiple variables, including gender, education, commitment, and business practices, on firm revenue.

Key Findings: The Impact of Formality, Integration, and Commitment on the Performance of Latino-Owned Small Businesses
Beyond owner demographics such as gender and education, the most influential factors in business performance are: Owner’s commitment to the business Formal registration of the business Integration of the business into the broader community

Key Findings: The Impact of Formality, Integration, and Commitment on the Performance of Latino-Owned Small Businesses

Beyond owner demographics such as gender and education, the most influential factors in business performance are:

Owner’s commitment to the business
Formal registration of the business
Integration of the business into the broader community

Future Implications:

The findings identify several levers for strengthening Latino-owned businesses that can be influenced by public policy and community support programs. Policymakers can use these insights to design initiatives that foster sustainable and successful small business creation.

Future research may extend this work by examining other ethnic groups, using different measures of business success, and exploring outcomes in different geographic contexts.

Support from the Ciocca Center

The Ciocca Center’s support of small businesses and entrepreneurship inspired the selection of the research question and the distribution of the results. The Ciocca Center’s financial support made it possible to perform one-on-one interviews in Spanish with the entrepreneurs.