Journal Article

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

Fairlie, Robert W., Robb, Alicia M.

2007

Overview

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.

• Publisher: The University of Chicago Press,University of Chicago, acting through its Press
• Subject: African Americans / Black owned businesses / Business / Business economics / Business organization / Business ownership / Business structures / Chambers of commerce / Coefficients / Companies / Economic models / Economic performance / Economic statistics / Economic theory / Empirical tests / Employment / Families & family life / Family firms / Family members / Family owned businesses / Family roles / Human capital / Inheritances / Minority owned businesses / Owners / Ownership and control / Profits / Proprietors / Regression coefficients / Sales / Self employment / Small & medium sized enterprises-SME / Small businesses / Studies / U.S.A / Variable coefficients / Work experience