Conclusion
This paper examines the persistence and differences in entrepreneurship among Stanford alumni by ethnicity and nationality. We find that among Stanford alumni, Asian Americans have a higher rate of entrepreneurship than white Americans. However, non-American Asians have a substantially lower, by about 12% points, start-up rate than Asian Americans. Such discrepancy not only holds for entrepreneurial choice but also for investing as an angel investor or VC, or utilizing Stanford networks to find funding sources or partners. Participation in the entrepreneurship programs as a student does little to reduce this gap. Furthermore, non-American Asians have lower participation rates in Stanford University’s entrepreneurship education program, compared to their Asian American counterparts. We find that parental entrepreneurship status is one of the strongest and most persistent predictors of entrepreneurship, and we find that parental entrepreneurship is lowest among Asians, especially non-American Asians. Moreover, these groups have high intergenerational persistence in entrepreneurship, i.e., a high correlation between one’s entrepreneurship status and one’s parents’ entrepreneurship status. The intergenerational correlation of entrepreneurship is very high for East Asians, e.g., 0.51 for Koreans and 0.75 for Chinese, compared to 0.23 for US citizens. This value for US citizens does not differ by ethnicity. The low level of parental entrepreneurship and the high degree of intergenerational correlation in entrepreneurship among Asians likely result in the lower level of entrepreneurship and participation in university entrepreneurship programs among Asians relative to their Asian American counterparts.
