Black-owned firms are growing in terms of both number and economic importance. They play an important role in providing jobs as well as products and services, particularly in urban communities. In spite of this, prior research indicates that black-owned firms experience greater difficulty in securing sources of external capital. This study revisits this issue using newly released data from the 2003 Survey of Small Business Finances. Results reveal that black-owned firms were no less likely to have loans than white-owned firms controlling for firm and owner characteristics. Nevertheless, black-owned firms were still significantly more likely to be turned down for loans and more likely to refrain from applying because they assumed they would be turned down. Further, black firm owners who were approved for loans paid significantly higher rates of interest.
In the last decade or so, there has been a growing interest in an area researchers are calling social entrepreneurship, a movement spearheaded by individuals with a desire to make the world a better place. This paper describes the structure and process of international development in Africa from the perspective of a social entrepreneur. The authors address the opportunities and challenges faced by social entrepreneurs as they attempt to affect large-scale social change. The result of this study is a unique development model that provides tools for the social entrepreneur to address problems and build capacity and sustainability within the African context.
This study examines the historical development of corporate governance structures in First Nations communities in British Columbia, where development corporations are employed to assist privately-owned and community-owned entrepreneurial enterprises. First Nations entrepreneurial activity functions in an environment where business must market to a global economy while preserving traditional values, beliefs and other cultural elements. A brief history of First Nations and their enterprise development efforts is presented. Empirical research findings describe the close relationship between local community and corporate goals and identify conflicts of interest between political leaders and management of development corporations. The evidence demonstrates entrepreneurial success and economic development of First Nations communities rely on an independent decision-making process within business development corporations. An alternative business model is developed utilizing the empirical research, social enterprise literature and the unique regional cooperative model of the Mondragon region of Spain. The new model respects the land base and other environmental and social values while providing a framework for economic success. Exploration of this unique enterprise-to-region development model, which incorporates consideration for the natural environment and social and cultural values, offers lessons to other societies and regions that will assist in the movement toward an economic system based on concepts of sustainability.
This study examines CEO succession in small firms and the impact of CEO honing and enterprising competence on firm performance within a contingency framework. In a study of 162 small firms, we hypothesize that a newly appointed CEO will bring entrepreneurship to its small firms, but the results do not support this. Instead, the results indicate that a new CEO tends to introduce honing in the firm. Only CEO market enterprising had a direct relation to better performance. However, we find several instances of moderation effects attributable to strategic competence, environmental uncertainty, and the nature of tasks in the company.
What role do institutions play in the development of entrepreneurial ventures? What factors influence whether organizations will engage in entrepreneurial activity? While research has examined the individual and group-level characteristics of entrepreneurs, this paper explores the role of institutions and organizations in the development of entrepreneurial ventures. Using the "Black Church" as an institutional context, we predict entrepreneurial activity patterns of individual congregations based on denomination-specific institutional logics — rules and norms that either facilitate or constrain organizational action.
In this paper, we compare first generation entrepreneurs with entrepreneurs whose parents were self-employed. To test the hypotheses, we use PSED II data on nascent entrepreneurs to explore the effects of parental self-employment (PSE) on various start-up activities associated with planning and organization, and on funding structure. Overall, results show a difference in patterns of behavior between first generation entrepreneurs and entrepreneurs whose parents were self-employed, supporting the notion of intergenerational learning. Specifically, results indicate a positive relationship between PSE and early deployment of startup activities and a positive relationship between PSE and attaining informal external funding. Post hoc analyses for gender differences show that (a) the relationship between PSE and startup activities exists primarily for men and (b) gender differences exist in the effects of PSE on funding structure: for women, PSE is positively associated with the use of personal savings, whereas for men, PSE is positively associated with use of external informal funding. The results of our findings and their implications are discussed.
The business strategy perspective argues that achieving competitive advantage hinges on pursing a coherent competitive strategy. Family businesses are also said to manifest a strong desire to develop enduring and committed social relationships with external stakeholders. This study examines the effect of business strategy on performance of family businesses and how their managerial social networking relationships with external entities moderate the business strategy–performance link. Using data from 54 family firms from Ghana, the findings indicate that: (1) the pursuit of the business strategies of cost leadership and differentiation create competitive advantage for family businesses; (2) social networking relationships with government bureaucratic officials and community leaders are beneficial to family businesses, but social networking relationships with political leaders is detrimental to family businesses; and (3) the benefit of business strategy to family businesses is moderated positively by networking with community leaders, but negatively by networking with political leaders.
Numerous projects have been implemented with the aim of promoting the development of local enterprises as a means to improve the conditions of rural communities. Their failure points to the difficulty of adapting the concept of "entrepreneurship" to different cultural settings and to the diversity of community needs. Whereas the community is typically treated in the literature as an exogenous part of the environment for entrepreneurship, an emerging point of view is to treat the entrepreneur and the enterprise as embedded in a network of relationships, usually local. The objective of this paper is to investigate the conditions that enable community entrepreneurial activities to alleviate poverty and promote local development. The paper analyzes Gram Mooligai Limited (GMCL), a community-based enterprise in India active in the herbal sector, which delivered interesting results in relation to the paper's focus. Findings from this case study highlight the importance of seeing entrepreneurial activity and enterprise development programs in a much more holistic way than they are conventionally understood.
The research explored the antecedents and outcomes of seeking information and advice about the marketplace in which a small firm exists. A survey of 185 small business owners suggested that both operating in a dynamic environment and having complex marketing activities had a direct link to the frequency with which the small business owner sought marketplace information and advice. Marketplace advice seeking, in turn, was positively correlated with owners' perceptions of business performance. The usefulness of the findings for owners and business-support advisors was discussed.
Studies of the relationship between gender and entrepreneurship have shown that men are significantly more likely to start a new business than women. Because an individual's entrepreneurial intentions are shaped by the perceived feasibility and desirability of an entrepreneurial opportunity, these results have generally emphasized how men perceive themselves as more capable of pursuing entrepreneurial opportunities than women. In this study, men have a higher level of self-efficacy than do women regarding entrepreneurial abilities. At the same time, the higher levels of involvement in business planning processes caused women to have a higher sense of ownership in the plan than did men. This sense of ownership is positively and significantly related to the perceived likelihood of success of the new venture. The findings of this study suggest women adopt certain roles and affects in the development of entrepreneurial opportunities that provide alternative explanations to the beliefs-attitudes-intentions-behavior model of intentionality. The roles and affects women adopt during new venture planning may give them superior insights into the likelihood of success of the new venture.
Public authorities throughout the world, recognizing both the importance and fragility of SMEs, have over the years created agencies and set up numerous venture development support and assistance measures. Despite all these efforts, SME owner-managers do not appear to make maximum use of the services available. Results from a survey of 70 SME owner-managers show that the likelihood of an SME using public support services increases as the perceived usefulness of public agencies and their services increases, and as the level of knowledge of public agencies increases. Furthermore, the probability of using public support services decreases as the experience of the owner-manager increases. On one hand, many owner-managers do not seem to understand the utility or relevance of the services the agencies provide, while on the other, they do not seem to know enough about the agencies working in their region. However, most of the owner-managers who had used the agencies felt the services they had received were appropriate to their needs. Therefore, the problem appears to lie more with the perceptions of certain owner-managers than with the nature or quality of the services themselves.
Institutions influencing entrepreneurship are undergoing significant transformation in China. During the Mao era, private entrepreneurship was virtually eradicated and was a political taboo. As reflected in the macro-level economic data, there has been an evolution of entrepreneur-friendly institutions in the country. A constellation of factors linked to China's global integration is pushing through fundamental changes in institutions related to Chinese entrepreneurship. The logics or governance structures and organizing principles related to entrepreneurship are rapidly changing in the country. This paper examines forces influencing the diffusion of instrumental values promoting entrepreneurship among Chinese institutional actors.
This paper analyzes the motivations of eight female Afghan entrepreneurs to start up their own business and the problems they encountered during start-up and operations. Income generation was the most important push factor but pull factors including desire for independence and autonomy were also important. However, in contrast to studies in other countries, the desire for achievement was not emphasized. An unexpected finding was the emphasis on the desire to help non-family members by running a business. The main problems included financial problems during start-up and operations, lack of contacts and security during operations. Gender-specific problems included limited market, mobility constraints and negative attitudes and lack of social acceptance for female entrepreneurs. The paper concludes with a discussion of the findings.
Women entrepreneurship in the informal sector, such as street food vending, is important for poverty alleviation in West Africa. The street food sector provides employment for women and inexpensive and nutritious food for the urban poor. In this paper, we determine the importance of the cowpea street food sector, evaluate the determinants of successful enterprises and ascertain the impact of economic, cultural, religious and geographic differentials between enterprises in Niamey, Niger and Kumasi, Ghana. Data were collected through in-person interviews with 114 and 122 women street food entrepreneurs in both countries in 2009. Results revealed that women entrepreneurs engaged in the cowpea street food sector can earn incomes 4 times and 16 times higher than the minimum legal wage in Niamey and Kumasi, respectively. Incomes earned from these entrepreneurial activities contribute directly to health, education and needs of their families. OLS regression results indicate that lack of financial resources, stable business locations and religious beliefs are important entrepreneurial success factors. Cross-country comparisons revealed enterprises in Kumasi are larger and more successful than those in Niamey.
This paper analyzes entrepreneurs in South Africa's informal sector. The aim is to determine the extent to which African informal retail trade spawns viable enterprises. To assess the prospects for South Africa's informal retail sector, we obtained questionnaires from owners of small-scale establishments in a random sample taken throughout the country in 2007. Owner's income and sales data provided a basis for investigating viability. Regression analysis tests hypotheses identified as crucial to higher income and sales, including startup capital, size, male/female ownership, business training and the proximity to shopping centers. Also tested is the influence of urbanization externalities on sales and owner's income. Initial capital and positive urban externalities have a strong influence on the ability to generate a sustainable livelihood for informal entrepreneurs. After controlling for startup capital, location and other factors, it appears women entrepreneurs face distinct difficulties in generating a viable income through informal retail trade.
Africa is arguably the richest continent in terms of minerals and natural resources. Prior research has also shown that Africa has an abundance of entrepreneurs who possess the ability to identify business opportunities and exploit them. However, the continent's entrepreneurial performance has been weak. Our goal in this paper is modest and is simply aimed at identifying and synthesizing the available evidence on economic and institutional factors affecting entrepreneurship in Africa. This paper also reviews various mechanisms by which foreign businesses are exploiting Africa for resources and market and examines Western response to the low level of entrepreneurial activities in Africa. Finally, this paper provides case studies of some successful entrepreneurial activities in the continent. The cases indicate that successful businesses do not necessarily need to depend on natural resources.
Unlike large firms with management teams, small businesses are usually run by one key person, the owner-entrepreneur, who bears almost all of the risks and makes most of the decisions related to the business. Because the owner-entrepreneur also embodies most of the firm-specific knowledge capital, health of the owner-entrepreneur is an important factor in the production process. Following a cohort of respondents in townships around Durban, South Africa, over a three-year period, we examined the relationship between an individual's physical health and the decision to start a business. Our results suggest respondents who were recent business entrants were in better health than respondents who did not start new businesses. Moreover, respondents without a business at the beginning of the study who later opened businesses during the study interval were significantly more likely to have better baseline health than those respondents who never started a new business. Hence, good health among entrepreneurs seems to be an important prerequisite to small business entry.
This study investigated the critical problems encountered by African American and White-owned formation and early growth firms in rural businesses. Analyses were conducted to determine the most critical types of problems encountered by these businesses and the relationship between the types of problems reported and the owner's race and firm's developmental stage. Strategic problems were the most critical problems by business owners in the sample, regardless of race or developmental stage, followed by administrative and operations. Although no significant relationship was found between the type of problems and the owner's race, a significant relationship was found between problem type and the firm's developmental stage, such that businesses in the formation stage are more likely to encounter strategic problems and early growth firms more often experience administrative problems.
This study explores African-American (AA) entrepreneurship through the lens of social capital. Using a foundation of social capital theory, this study attempts to validate the hypothesis that social capital is a determinant of whether AA entrepreneurs choose to function in the formal or informal economies. One hundred and sixteen African American entrepreneurs participated in the study, which utilized respondent driven sampling, a technique for studying hidden populations. Although the results for the study failed to confirm the hypothesis, they do offer some insight into the relationship between the informal and formal economies and minority entrepreneurship.
This paper presents findings from a pilot study of four African entrepreneurs new to established, all who started their business as young people. Their narratives, enhanced by the inclusion of significant events derived by the use of the critical incident technique, provide useful oral insights into their entrepreneurial heuristics and behavior. These reveal key influences and critical issues that affect the young African's decision to start a business and also perspectives into the nature of entrepreneurship in Africa. This paper concludes that the dichotomy between push and pull entrepreneurship is oversimplified, and social structures such as class, education and family background impact on ideas, opportunities, resources, skills and motivation. But most importantly, entrepreneurship can survive in an environment with many constraints, because career choices are influenced by the youth entrepreneur's perception, decision-making abilities and experiences. Implications are drawn for the development of young entrepreneurs in Africa.
Greece has experienced rapid growth in immigrant and refugee populations since 1990. Although most are immigrants from Albania and throughout the Balkan region, some immigrant and refugee groups arriving in Greece also come from the former Soviet Union, Southeast Asia and Africa. Some of these newcomers have started small businesses in their quest to become economically self-sufficient, serve the consumer needs of fellow newcomers, and integrate into community life. The purpose of this research is two-fold: to review the extant literature on social and economic factors influencing immigrant entrepreneurship in Greece, and to determine characteristics and business profiles of Albanian immigrant-owned small businesses within the municipality of Attiki — the location of Athens, Greece's capital city and largest urban center.
This paper sets out to analyze social entrepreneurship in the Central America Learning Alliance, in the context of recent literature on entrepreneurship and learning. Drawing on a recent and rapidly growing literature that describes entrepreneurship as a process that is inherently dynamic and experimental, with learning as a core component, we focus on social entrepreneurship in development as a catalyst of social transformation. A case study of a multi-stakeholder network focused on promoting processes of rural enterprise development, known as the Central America Learning Alliance, is used to illustrate social entrepreneurship in the context of the framework for innovation and learning that is developed in the first part of the paper. We conclude that the key concepts underlying entrepreneurial learning have important implications for social entrepreneurship in the context of building dynamic livelihoods for the poor of Central America.
This article investigates the largest American black-owned companies over a 30-year period, from 1974 to 2004. Trends with regard to the growth and decline of industry categories and of individual companies, and with regard to these companies' survival rates, are analyzed. Comparable survival rates of small businesses in general, of minority businesses, and of large corporations are investigated. The important factors of corporate minority procurement programs and government minority set-aside programs are evaluated. The phenomenon of large American corporations acquiring some of the most successful black-owned businesses is also studied. These various factors relating to black business success and failure lead to a range of implications and recommendations for current and aspiring minority business owners, as well as to consultants to and researchers of minority business.
In a study of 149 entrepreneurs operating businesses in heavily Native American indigenous communities, no significant differences were found in three constructs of entrepreneurial business orientation and two constructs of small business orientation between Native American entrepreneurs and majority entrepreneurs. Community development officials can use the findings to lay the foundation for cultivating entrepreneurship among all community residents as no significant differences between indigenous and majority small business owners in their strategic choices of entrepreneurial and small business orientations was found. This information allows development officials to approach all potential entrepreneurs with a common method.
Social capital is thought to be an important source of social cohesion and a key ingredient for socioeconomic expansion in developing nations. We study its role among street vendors and their money lenders in Caracas, an illegal business based solely on trust and social bonds. We analyzed demand and supply of credit by informal street vendors and money lenders, exploring the relationship between street vendors' assets, income generated, financial and human capital and financial strategies, and those of the money lenders. We found that street vendors' main source of working capital were money lenders, despite charging the highest interest rate. The kind and amount of credit was not correlated to higher incomes. On the supply side, we found that money lenders based their business almost exclusively on trust and manage all clients personally, which limits the growth of their business. This study suggests that the main constraint for increased productivity in the informal sector is not the cost of capital, but the transaction costs involved in accessing credit and a lack of legal enforcements, and that improvement of the lending business is difficult without institutional support.
This study explores the financial intermingling behavior of Mexican-American and Korean-American owned and operated small businesses. It posits that ethnically-owned and -operated small businesses with strong familial ties and more limited access to financial capital are more likely to intermingle financial resources than other small businesses. Mexican-American small business owners typically have very strong familial ties, while Korean-American small business owners typically have very strong community ties. Perhaps more importantly, Mexican-American small business owners have less access to pools of community capital than Korean-American small business owners. Therefore, it is expected that Mexican-American small business owners are more likely to intermingle financial resources than Korean-American small business owners. Even when controlling for the time in United States and English language spoken in the household, this study suggests Mexican-American small business owners are more likely to intermingle financial resources than Korean-American small business owners. Within these two ethnic groups, similar factors contribute to intermingling. Small business owners living in rural areas and borrowers are more likely to intermingle financial resources for both ethnic groups.
This study utilizes the Korean-American and Mexican-American samples in the National Minority Business Survey to examine the debt structure of small businesses owned by individuals from these ethnic groups. Small business owners with higher household net worth were more likely to borrow from finance companies, friends, and credit card companies. When controlling for business, business owner and family characteristics, Mexican-American small business owners with high net worth were significantly more likely to borrow from commercial banks than Mexican-American small business owners with low net worth are. Korean-American small business owners with high net worth were significantly more likely to utilize family loans than Korean-American small business owners with low net worth are. Korean-American small businesses appeared to be more financially dependent on the financial strength of their community, while Mexican-American small businesses owners appeared to be more financially independent.
In this paper, we compare the intentionality of students in graduate business programs in the United States and China toward becoming entrepreneurs. We utilize Amabile's Work Preference Inventory (WPI) to examine the motivational dimension of entrepreneurial intentionality and the Theory of Planned Behavior (TPB) to compare the impact of gender and family history of self-employment on employment intentionality. Our results suggest there is a positive relationship with entrepreneurial intent in both the intrinsic challenge characteristic and extrinsic compensation characteristic. Results also suggest the intrinsic enjoyment characteristic and extrinsic outward characteristic are negatively correlated to self-employment. In addition, the study found that males in China exhibited a significantly greater intentionality toward self-employment than females did. We also found that entrepreneurial intentionality is stronger in the U.S. study group than in the China group for those with prior self-employment experience, as well as when they have a background that includes a family history of self-employment. However, when there is no family background of self-employment, the Chinese show greater intentionality to become self-employed than the group located in the United States.
Residential segregation has played a central role in theories of minority entrepreneurship. This study integrates two theories in the extant literature on minorities and urban areas (spatial assimilation theory and labor market disadvantage theory); and tests a hypothesis on the self-employment likelihood of black Americans. Descriptive statistics indicate a negative relationship between black-white segregation and increasing socioeconomic status (SES), although blacks remain considerably residentially segregated from whites of similar SES. The model results indicate that, after controlling for a number of factors, segregation of high SES blacks and whites in a metropolitan area is associated with higher likelihood of black self-employment.
The mission and performance of an enterprise is the legal and strategic responsibility of the Board of Directors (BOD). For the BODs of microfinance institutions (MFIs) this task is even more challenging. This study investigates the connection between the composition and roles of BODs and organizational evolution. It builds on the experiences of BancoSol and Los Andes, two MFIs that pioneered microfinance in Bolivia. The findings support the notion that BODs evolve to fit the needs of organizations at different stages of industry and organizational evolution. While these results are not surprising, previous research has not shown the micro-dynamics involved in this co-evolution and thus their impact on board composition and roles.
Entrepreneurship is now recognized as a strategy to achieve economic growth in many regions. The goal of this paper is to increase the understanding of entrepreneurship's contributions to economic growth and its potential as a development strategy for a region, such as Appalachia, characterized by poverty and underdevelopment. Using data on Appalachian counties, a system of simultaneous equations is empirically estimated to measure the effects of entrepreneurship on economic growth and development. An expanded Carlino-Mills growth model is used where changes in population, employment and per capita income represent measures of growth. Proprietorship and firm formation rate data are used to measure entrepreneurial activity. The results show start-up businesses contribute significantly to determining population growth. Employment growth is positively affected by self-employment rates as well as by firm formation rates. In terms of policy implications, the paper recommends the creation of an environment to encourage entrepreneurial activity as a strategy to battle unemployment. It concludes that regional policy makers need to renew their efforts to support the growth of self-employment and sustain the existing firms.
Entrepreneurship has become a defining business trend in many countries throughout the world. The ranks of entrepreneurs contain a sizable contingent of women. As a result, research into the pathways of entrepreneurship as a general phenomenon as well as a career option for women has flourished in recent years. However, very little of this research has focused on women entrepreneurs in Arab countries, particularly those around the Gulf of Arabia, where private enterprise is viewed as a way for these nations to reduce their reliance on oil and their dependence on expatriate (foreign) workers. This study of the business start-up experiences of ten Arab women from Bahrain and Oman can serve as a starting point for such research. Although based on a non-representative sample, it suggests that the experiences of the Arab women entrepreneurs studied generally parallel those of their counterparts from other parts of the world with a few distinct differences. These differences relate to securing start-up capital and other resources, networking, and work/family balance. Infused with Arab and Islamic values, the unique cultural milieu played a major role in shaping the entrepreneurial experiences of the Bahraini and Omani business owners studied.
As this paper examines the relationship between Islamic values and entrepreneurial activity, it seeks to establish whether these values can be more effectively tapped into to raise the profile of Islamic form of entrepreneurship. A written, self-administered questionnaire among a random sample of Saudi entrepreneurs in the city of Riyadh was employed to generate descriptive data to assess the views and attitudes of Saudi entrepreneurs toward both conventional and Islamic forms of entrepreneurship. We find that Saudi entrepreneurs perceive themselves to be committed Muslims who consider entrepreneurship a religious and economic duty intended to generate halal (lawful) income to meet their financial obligations and to contribute to the falah (well-being) of the Muslim ummah (nation) in this life and hereafter. The findings also negate the prevalent conventional assumption that Islam is intrinsically anti-modernization and anti-development, and that the religiously-based Saudi culture would hinder the emergence and the development of a vibrant entrepreneurship culture in Saudi Arabia.
This study proposes that cooperative efforts in microlending aid economic development and poverty alleviation in transitioning and developing countries by creating networking systems in which people can expand their businesses through working capital and community cooperation. Two field studies are used to validate the authors' claims. The first examines a microfinance cooperative structure in Bulgaria as a means to secure credit, savings, technical support and networking opportunities for cooperative members. The second looks at a cooperative microfinance institution in the Philippines that appears to create greater socio-economic growth for poor entrepreneurs as well as NGO financial viability. Both studies suggest that cooperative microlending leads to high survival rates and success of self-employed entrepreneurs by facilitating social capital through their organizational processes.
This paper reports results of a longitudinal quasi-experimental study that focused on the impact of entrepreneurial education and societal subjective norms on entrepreneurial attitudes and intentions of university students in Uganda to start a business. Data were collected in two waves: wave one before the entrepreneurship course and wave two after the entrepreneurship course — four months later. The sample composed of college students. Analyses included tests of significance of changes in the attitudes and intentions of students after the entrepreneurship course, the mediating role of attitudes and moderating role of employment expectations. The results show small but significant changes in attitudes and a significant mediating role of attitudes — perceived feasibility, perceived desirability and self-efficacy, but non-significant moderating influence of employment expectations. The findings offer lessons for policy makers and more questions for researchers.
Self-employment promotion for poverty reduction has been administered through microcredit programs in Bangladesh. While microcredit has opened up new opportunities for the poor to start enterprises, some of them have not benefited from microcredit schemes. To enable the poor left behind to participate in the rural economy as entrepreneurs, this paper proposes the creation of a partnership enterprise between a sponsor and poor producers. In this partnership, the sponsor as a master trader supports partner-producers financially, technically and managerially through a subcontracting arrangement. The paper develops this conceptual relationship in a real rural setting through the observation of an income-generating program implemented by a Bangladeshi NGO in the field of poultry-rearing. This empirical form of partnership enterprise suggests an opportunity for the poor to enter into a previously inaccessible market and gain a regular income source, which builds the foundation of their household economy beyond subsistence.
The goal of this paper is to gain a better understanding of the factors that determine the risk premium on bank lines of credit obtained by SMEs, and whether firm size, which may be used by banks to segment their client base, also has an impact on credit costs. An analysis of data from 406 SMEs in Canada showed the main determinants of risk premium were firm size, line of credit size, ability to repay, the relationship between banker and entrepreneur, and the length of the relationship with the bank. These determinants change according to the market segment in which the potential borrower operates. Banks appear to use a transactional approach for smaller borrowers, where credit terms are based on quantitative financial data, and a relational approach for larger firms, where relationship length and quality become significant.
This study reviews selected issues related to the role that black-owned banks can play in contributing to the economic development of low-income, minority communities. Given their paucity in numbers, their lack of size, and their financial weaknesses, they have yet to demonstrate that they can serve as an important engine of growth for their communities. Also, for over 150 years, it has been argued that black-owned banks are needed because of discrimination by financial institutions against black customers. Various studies give conflicting results, but so far there is no conclusive evidence that lending discrimination exists. To encourage bank lending to low-income communities, the Community Reinvestment Act was enacted. Some black-owned banks however, have complained that the Act encourages unfair competition from other banks for the same loan customers. Hence, the case for an essential role for black-owned banks has yet to be made decisively. Evidence, however, suggests that their profitability and efficiency improves with time. Hence, in the future, with greater experience, black-owned banks may play a more important role in their communities.
This study investigates the barriers to growth of small- and medium-sized enterprises (SMEs) in Kosova. It is based on a SME survey conducted by Riinvest Institute at the end of 2002 which identified critical business environment barriers perceived by entrepreneurs such as legal environment, administrative burden, external financing, tax burden and unfair competition. First, based on this SME survey, the econometric model is constructed in order to test empirically the validity of Gibrat's Law. Then, in order to identify and measure the impact of current reported business environment barriers on SME growth, the Gibrat's Law is augmented with other business environment variables. The econometric results suggest that firms' growth is negatively linked to firms' size and age, suggesting that Gibrat's Law does not hold for growing SMEs in Kosova. Also, the growth of the SMEs is reduced by the presence of the business environmental barriers such as tax burden, unfair competition and inadequate financing. Econometric results raise important issues and policy implications for the development of the SME sector in Kosova.
This article deals with Triple Helix (university, industry and government cooperation) from an institutional theory perspective. The empirical context is the Western Cape Region in South Africa and the focus is entrepreneurship development. The purpose is two-fold: first, the existing Triple Helix model is adapted to the South African context; and second, facilities and impediments for working according to Triple Helix in South Africa are identified. The empirical material consists of a survey and three longitudinal case studies illustrating the degree of cooperation between the three parties. The article contributes to knowledge about how the Triple Helix model works on a regional level in a developing country. The study draws the following conclusions: when cooperation is to be identified between the three actors, only two of the three are involved; one missing link in the Triple Helix model is the focus on the entrepreneur; cooperation between the three parties are incidental rather than planned and there is lack of structure. In turn, some of these conclusions may be an effect of institutional changes on a national level. For a normative legacy, the article proposes a set of suggestions for incorporating all relevant parties on a practical level.
Examining the opportunity recognition processes of black and white entrepreneurs may help improve the lagging rate of black entrepreneurship. Based on the framework provided by Bhave's (1994) model of new venture creation, and using data collected through the Panel Study of Entrepreneurial Dynamics, we found significant differences between the percentage of black and white nascent entrepreneurs who recognized externally-stimulated versus internally-stimulated opportunities and their projected firm revenues. As predicted, black nascent entrepreneurs were more likely to pursue externally-stimulated opportunities with significantly lower expected revenues than their white counterparts. Academic and practical implications are discussed and future research directions are offered.
This article uses data from the 2003 Survey of Small Business Finances to determine if banks ration credit more severely to black-owned firms. Our results reveal this is the case. Using the Heckman two-step procedure, we determined that black- and white-owned firms have a comparable demand for credit as measured by their actual use of lines of credit. Controlling for firm and owner characteristics, however, black-owned firms had lower line of credit limits suggesting constraints in supply. Further, our findings suggest the supply of credit to black-owned firms is even more severely constrained than other minority-owned firms. These findings highlight the possibility of discrimination against black-owned firms in the form of credit rationing.
Loans and trade credit are major sources of short-term debt and liquidity for small firms. This article uses data from the 1998 Survey of Small Business Finances to compare the borrowing experience of small firms owned by black men to those owned by white men. Results reveal that black firm owners were more dependent on loans from non-bank sources than white owners. Black men were significantly more likely to have been turned down for their most recent loan and were more likely to be discouraged from applying for loans. Results also reveal that black men were more likely to be turned down for trade credit. Overall, these findings seem to suggest that firms owned by black men have a more difficult time securing sources of short term debt than those owned by white men.
In this study, we seek to understand the key differences between the entrepreneurial experience for Mexican immigrant and US-born Mexican entrepreneurs. We focus on differences in motivation for start-up, reliance on ethnic enclaves and business management practices. Using data from the 2005 National Minority Business Owner Survey, our sample consisted of 156 Mexican American entrepreneurs (55 immigrants and 101 US-born). Results suggest that even within a particular minority group, there are key distinctions between immigrant and US-born entrepreneurs. For example, US-born Mexican entrepreneurs are more motivated by the individualistic financial benefits of being an entrepreneur, while Mexican immigrant entrepreneurs are more motivated by serving society and their co-ethnic community. Implications are discussed.
Despite the increasing interest in researching female entrepreneurship, little is known about gender differences in pre-venture process and the variables that mediate the relationship between gender and entrepreneurial intentions. The purpose of this study is to provide a conceptual framework for understanding gender differences in entrepreneurial intentions. Using this framework, we explore gender effects on entrepreneurial intentions and identify factors that may account for the gender gap in entrepreneurial intentions in a sample of Bulgarian university students. Our results show that women have lower entrepreneurial intentions than men. The gender effect on entrepreneurial intentions is fully mediated by perceived behavioral control and partially mediated by perceived subjective norms and attitudes toward entrepreneurship. Policy measures designed to encourage female start-ups should be directed at attitudes, subjective norms, perceived behavioral control and the link between entrepreneurial intentions and behavior among women.
Using National Family Business Panel data combined with national natural disaster and federal disaster assistance data, the purpose of the study was to investigate relative contributions of human, social and financial capital; natural disaster exposure; and federal disaster assistance to business-owning family resilience over time for male and female family business owners. With a theoretical foundation of Sustainable Family Business and Conservation of Resources theories, the study examined 311 small family firms from the National Family Business Panel. Federal disaster assistance explained a significant amount of variance in firm-owning resilience. Higher levels of federal disaster assistance were associated with lower family firm resilience for male-owned businesses and higher family firm resilience for female-owned businesses. This study advances knowledge of firm sustainability after natural disasters by adding to the conceptualization and measurement of family firm resilience; by having baseline firm financial data prior to disaster exposure; by utilizing a national, representative, longitudinal family firm sample; by including a range of natural disasters and federal disaster assistance; and by including family resilience over time.