Why Are Black‐Owned Businesses Less Successful than White‐Owned Businesses? The Role of Families, Inheritances, and Business Human Capital

By R. Fairlie, Alicia Robb. Journal of Labor Economics, 2007

441 citations recorded by the source corpus.

Using confidential microdata from the Characteristics of Business Owners survey, we examine why African American–owned businesses lag substantially behind white‐owned businesses in sales, profits, employment, and survival. Black business owners are much less likely than white owners to have had a self‐employed family member owner prior to starting their business and less likely to have worked in that family member’s business. Using a nonlinear decomposition technique, we find that the lack of prior work experience in a family business among black business owners, perhaps by limiting their acquisition of general and specific business human capital, negatively affects black business outcomes.

Subfields: Management of Technology and Innovation, Organizational Behavior and Human Resource Management, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/916784e145634da1704afa82cf957e99f9d9b8f2

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Citations in the corpus

A RESOURCE-BASED VIEW OF NEW FIRM SURVIVAL: NEW PERSPECTIVES ON THE ROLE OF INDUSTRY AND EXIT ROUTE (2013, result): “Similar to previous studies (Fairlie and Robb, 2007), we find that businesses owned by white entrepreneurs had a higher probability of survival.”
Intergenerational transmissions in immigrant self-employment: Evidence from three generations (2010, background): “Fairlie and Robb (2007) have shown that black business owners in the United States are less likely than white business owners to have a self-employed family member.”
Entrepreneurship and Family Firm Research: A Bibliometric Analysis of An Emerging Field* (2016, background): “On the other hand, there are studies focusing on the influence that belonging to a particular ethnic group, usually a minority within a geographical context (Adendorff and Boshoff 2011; Chang, Memili, Chirsman, Kellermanns, and Chua 2009; Fairlie and Robb 2007)—Greeks in South Africa, Koreans and Af”
Entrepreneurship Education in a Poverty Context: An Empowerment Perspective (2019, background): “…coupled with hidden rules, norms, and values that enable the poor to survive, but which differ from those of the middle or wealthy classes (Payne, DeVol, and Smith 2009); and (f) lack of entrepreneurial role models, mentors, and exposure to operations of small enterprises (Fairlie and Robb 2007).”
Determinants of self-employment survival in Europe (2012, result): “Other studies point out differences between immigrants themselves (see Bates 1999; Jensen et al. 2003 or Georgarakos and Tatsiramos 2009) and between white and non-white individuals (see Holmes and Schmitz 1996; Fairlie 1999; Taylor 1999; Hout and Rosen 2000; Marti´nez-Granado 2002 and Fairlie and ”
The Capital Structure Decisions of New Firms (2010, unknown): “We examine these firms in columns (3) and (4), respectively.”
Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries (2013, background): “One exception are the studies showing how in the United States black-owned firms show lower survival rates and worse performances than White- or Asian-owned firms (Fairlie and Robb, 2008; Jarmin and Krizan, 2010).”