This project assesses the effect of social capital, defined as the clustering of Hispanics, on the probability of Hispanic business creation. A big issue in the social capital literature is identification. We use new econometric procedures to try to address this possible endogeneity and draw causal conclusions on the effect of social interactions on individual economic behavior. This essay provide robust empirical evidence on the role of social capital on Hispanic entrepreneurship. We also tackle the constructs of Hispanic heterogeneity and find a potential indicator for the Hispanic entrepreneurial environment.