Financial Intermingling in Korean-American and Mexican-American Small Businesses

Abstract

This study explores the financial intermingling behavior of Mexican-American and Korean-American owned and operated small businesses. It posits that ethnically-owned and -operated small businesses with strong familial ties and more limited access to financial capital are more likely to intermingle financial resources than other small businesses. Mexican-American small business owners typically have very strong familial ties, while Korean-American small business owners typically have very strong community ties. Perhaps more importantly, Mexican-American small business owners have less access to pools of community capital than Korean-American small business owners. Therefore, it is expected that Mexican-American small business owners are more likely to intermingle financial resources than Korean-American small business owners. Even when controlling for the time in United States and English language spoken in the household, this study suggests Mexican-American small business owners are more likely to intermingle financial resources than Korean-American small business owners. Within these two ethnic groups, similar factors contribute to intermingling. Small business owners living in rural areas and borrowers are more likely to intermingle financial resources for both ethnic groups.

The Effect of Cash Flow Problems and Resource Intermingling on Small Business Recovery and Resilience After a Natural Disaster

“…Financial bootstrapping entails alternative financial strategies in lieu of institutional borrowing (Winborg and Landström 2001). Consequently, resource intermingling can play a fundamental role in small business finances (Haynes et al 1999(Haynes et al , 2009Haynes and Avery 1996).…”