INFLUENCE OF FAMILY'S SOCIAL RELATIONSHIPS ON THE DEBT STRUCTURE OF MEXICAN-AMERICAN AND KOREAN-AMERICAN SMALL BUSINESSES

This study utilizes the Korean-American and Mexican-American samples in the National Minority Business Survey to examine the debt structure of small businesses owned by individuals from these ethnic groups. Small business owners with higher household net worth were more likely to borrow from finance companies, friends, and credit card companies. When controlling for business, business owner and family characteristics, Mexican-American small business owners with high net worth were significantly more likely to borrow from commercial banks than Mexican-American small business owners with low net worth are. Korean-American small business owners with high net worth were significantly more likely to utilize family loans than Korean-American small business owners with low net worth are. Korean-American small businesses appeared to be more financially dependent on the financial strength of their community, while Mexican-American small businesses owners appeared to be more financially independent.