Hispanic Business Ownership and
Industry Concentration in Michigan:
A Comparison to National Patterns

By

Rene Perez Rosenbaum, Ph.D.
Faculty Associate, JSRI
Assistant Professor, Resource Development

Statistical Brief No. 3

April 1995

 

The minority-owned business problem has been defined as the relatively low rate of participation in business ownership by minorities . In Michigan, the business problem is worse for Hispanic-owned firms (HOFs) where there are only 14 HOFs per thousand Hispanics as compared to the rate of HOFs for the nation as a whole (19 per 1,000 Hispanics). Nonetheless, Michigan has the nation's 14th largest concentration of Hispanic-owned firms.

This Statistical Brief presents data that examines in slightly greater detail Hispanic business ownership in Michigan. Census data on the stock of HOFs are combined with population data to compare the patterns of Hispanic business ownership in the state to those of the nation. State and national patterns in business ownership are examined for all HOFs, for women and male-owned HOFs, and for HOFs categorized by Hispanic subgroup. The state and national patterns in the concentration of HOFs in several industries are also examined. Among the questions to be addressed are the following:

  1. What is Michigan's share of the nation's stock of Hispanic-owned firms (HOFs) and what has happened to HOFs over time?
  2. Given the stock of HOFs in Michigan and the U.S., what is the gender distribution of Michigan HOFs and how does it compare to the gender distribution of U.S. HOFs?
  3. What is the rate of participation in business ownership for Michigan Hispanics and how does it compare to the national business ownership rate for Hispanics?
  4. What are the respective business ownership rates for Hispanic men and women in Michigan and how do they compare to the respective business ownership rates for Hispanic men and women in the nation as a whole?
  5. What is the distribution of Michigan HOFs amongst people of Mexican, Cuban, and other Hispanic origin and how does it compare to the national Hispanic subgroup distribution of HOFs?
  6. What are the business ownership rates for people of Mexican, Cuban, and other Hispanic origin and how do they compare to the national ownership rates of these Hispanic subgroups?
  7. What is the industry concentration of Michigan HOFs and how does it compare to the industry concentration of U.S. HOFs?

Answers to these questions are of particular relevance to Hispanic entrepreneurs and the state and private institutions which support private business. If we find, for instance, a concentration of Hispanic businesses in particular industries, then we would want to know if this concentration is related to the general types of businesses in Michigan as a whole. If we find that female headed HOFs are underrepresented, then we would want to explore the particular factors conducive to their potential success in private enterprise as a whole. If we find that the proportion of HOFs relative to the Hispanic population is low, then measures to increase Hispanic representation would warrant more attention. In short, since the representation of HOFs is critical to the success of Hispanic-Americans in the economy, a knowledge of their participation rates in various sectors is also important. Given the dramatic Hispanic growth in population in the state of Michigan , a proportionate representation in private enterprise would also indicate a positive trend.

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