Does the Ethnic Enclave Economy In uence Business Formation and Closure? A Look at Asian Enclaves in San Francisco and Los Angeles

Ethnic enclave economy theories and literature have long-studied factors that impact ethnic entrepreneurs outcomes, but they mainly focus on individual firm profitability. Community-level characteristics are not considered to be at the forefront when studying enclave economies, despite dominant collectivist ideology in Asian cultures, for example. This paper provides a different approach to measuring firm formation and closure rates by considering human capital, financial capital, and social capital in the community level. Using census tract data and registered business data between 2010 and 2018 in San Francisco and Los Angeles, I measure whether community factors play a role in business outcomes in Asian enclaves and if those variables are also present across Black and Latinx enclaves. Most strikingly, the significane of community factors vary across enclave types and geographies. I also find that community factors impact Asian enclave business outcomes more in San Francisco than it does in Los Angeles Asian enclaves. Asian enclaves tend to be the only enclave type that is statistically significant from non-enclaves and are characterized to have larger firm formation and closure rates