Informality and Latino-owned Businesses: A National Portrait of Unregistered Latino-owned Businesses

Objective. This study provides the first nationally representative portrait of unregistered (informal) Latino-owned businesses (LOBs) in the United States. Methods. We employ data from the 2018 Stanford Latino Entrepreneurship Initiative Survey of 4,024 US LOBs. We estimate the determinants of unregistered LOBs through a set of independent variables derived from entrepreneur demographics/firm characteristics utilizing a binomial logistic regression to predict the odds of group membership between (un)registered LOBs. Results. Approximately one-third of LOBs across the United States operate as unregistered enterprises. We find that LOB firm registration is associated with higher levels of education of the entrepreneur and larger size of the LOB. We uncover further links between entrepreneur acculturation and gender, and firm product offering and clientele ethnicity with firm registration. Conclusion. For the first time, we are able to establish a quantitative baseline for informality and firm registration among LOBs using a nationally representative sample.