ArticlePDF Available

Abstract and Figures

Traditional research on the reasons for the depressed rate of black entrepreneurship has focused on differences between black and white entrepreneurs. In this paper, we move beyond the individual entrepreneur and study consumers' perceptual differences of black and white entrepreneurs. Using a multi-disciplinary theoretical framework to study 846 participants, we found empirical evidence that there are significant relationships between perceptions of legitimacy and consumer attitudes toward entrepreneurs and intended patronage. In addition, there appears to be differences in the way consumers perceive black and white entrepreneurs, which suggest significant challenges facing black entrepreneurs. Implications and future research directions are discussed.
Content may be subject to copyright.
Howard University, School of Business
2600 6th Street, NW, Washington, DC 20059
Morgan State University, Earl G. Graves School of Business
1700 E. Cold Spring Lane, Baltimore, MD 21251
Howard University, School of Business
2600 6th Street, NW, Washington, DC 20059
Received October 2014
Revised February 2015
Published April 2015
Traditional research on the reasons for the depressed rate of black entrepreneurship has focused on
differences between blackaand white entrepreneurs. In this paper, we move beyond the individual
entrepreneur and study consumersperceptual differences of black and white entrepreneurs. Using a
multi-disciplinary theoretical framework to study 846 participants, we found empirical evidence that
there are signicant relationships between perceptions of legitimacy and consumer attitudes toward
entrepreneurs and intended patronage. In addition, there appears to be differences in the way con-
sumers perceive black and white entrepreneurs, which suggest signicant challenges facing black
entrepreneurs. Implications and future research directions are discussed.
Keywords: Black entrepreneurship; consumer perceptions; legitimacy.
1. Introduction
Historically, entrepreneurship and self-employment have been paths of economic ad-
vancement for disadvantaged people (Fairlie and Robb,2007). Individuals who are
unable to secure wage employment often turn to self-employment and entrepreneurship
(Dollinger,2003). Given the high rates of unemployment and the low labor participation
rates of black scholars, such as Bates (2006), argue that the formation and expansion of
The term blacksis used to represent the broader groups of blacks in the United States, which include African-
Americans and also black people from African countries, the Caribbean and other countries.
Journal of Developmental Entrepreneurship
Vol. 20, No. 1 (2015) 1550007 (19 pages)
© World Scientic Publishing Company
DOI: 10.1142/S1084946715500077
black-owned ventures is a viable strategy to address black unemployment rates. U.S. labor
and employment statistics consistently show that blacks suffer a much higher rate of
unemployment than whites. One would expect elevated levels of self-employment and
entrepreneurship among blacks to address the socio-economic impacts of higher unem-
ployment in the black community. However, this is not the case because blacks still
lag behind other racial groups in terms of rates of entrepreneurial entry and sustained
self-employment (Fairlie,2004;Fairlie and Robb,2007). Fairlie (2004) reported that the
self-employment for blacks is about one-third that of whites about four percent within
the black population to twelve percent in the white population. In addition, black-owned
ventures are more likely than white-owned ventures to fail (Fairlie and Robb,2007).
The diminished rate of black entrepreneurship has generated interest among entre-
preneurship scholars (Bates,1997;Crump,2008;Fairlie,2004;Fairlie and Robb,2007;
Hisrich and Peters,2002;Hout and Rosen,2000; Singh, Crump and Zu, 2009). Factors
such as levels of education and business experience (Fairlie,2004;Scarborough and
Zimmerer,2005), household asset levels (Bates,1997;Fairlie,1999), parental self-
employment (Fairlie and Robb,2007;Hout and Rosen,2000) and family structure (Singh
et al.,2009) have been researched as possible reasons for low rates of entrepreneurial entry
and successful entrepreneurship for blacks. Although these factors are important, they
directly focus on the black entrepreneurs background and immediate circumstances;
however, little or no attention has been paid to consumers, and specically, how their
perceptions of an entrepreneurs race affect their intentions of patronizing that entrepre-
Using a multi-disciplinary approach that encompassed sociology, psychology, mar-
keting and entrepreneurship, we conceptualized that consumersattitudes and legitimacy
perceptions of entrepreneurs impacted intended patronage. Further, we argue there are
differences in the way black and white entrepreneurs are perceived by consumers, which
impacts patronage of rms. Following a literature review and development of our hy-
potheses, we discuss the research methodology we used to test our hypotheses. Results and
discussion follow. We believe the ndings of this study shed further light on the reasons
for the diminished rate of new venture creation and lower rate of success among black
entrepreneurs. Implications, limitations and future research directions are discussed.
2. Literature Review and Hypotheses
Social behaviors (such as consumer behavior) are inuenced by experiences, perceptions
of legitimacy, attitudes and stereotypes one believes (Greenwald and Banaji,1995).
Consumers will patronize businesses they perceive as legitimate (Aldrich and Fiol,1994)
and toward which they have favorable attitudes (Fairchild,2008). Consumersattitudes
and perceptions of legitimacy may be even more critical for black entrepreneurs whose
businesses may suffer from the effects of negative stereotypes held about African Amer-
icans (Fairchild,2008). This may also be true of black consumers and other minority
ethnic groups who also tend to adopt the prejudices of the dominant group (Burgess and
Mosso, 2001; Jost, Pelham, Mauricio and Carvallo, 2002; Sarnoff,1960). In the following
M. N. Ogbolu, R. P. Singh & A. Wilbon
sections, we discuss the importance of perceived legitimacy and attitudes toward intended
patronage, as well as differences that may exist for black and white entrepreneurs.
2.1. Legitimacy
New businesses have to overcome the liabilities of newness (Stinchcombe,1965) that exist
because of the lack of specic sets of resources and capacities that more established
businesses have. New ventures experience higher rates of failure than more established
ones because they have weak claims to sources of support and are highly vulnerable to
environmental shocks, making them more prone to fail than established rms (Hannan and
Freeman,1984). Morse, Fowler and Lawrence (2007) explained the issues of liabilities of
newness and their effects on new ventures in general, stating that new ventures must
develop extant routines because they lack established roles and systems, which can result
in issues of trust and legitimacy.
Aldrich and Fiol (1994) pointed out that trust is a critical rst-level determinant of
business success and is an important factor in most social transactions, including business
transactions in which there is uncertainty about outcomes. Consumers tend to be careful
about what they buy and where they buy. Trust of a business establishment is important to
consumers in their business patronage decisions (Child and Mollering,2003;Gounaris,S).
Consumers are usually skeptical and are afraid of being taken advantage of by new or
unfamiliar businesses. Like trust, legitimacy is critical for diminishing the effects of the
liabilities of newness. An entrepreneurs success ultimately depends on the entrepreneurs
ability to gain customer support by achieving high levels of legitimacy (Zarkada-Fraser
and Fraser,2002). This leads to our rst hypothesis:
Hypothesis 1: Perceived legitimacy of an entrepreneur and his/her new venture startup is
positively related to intended patronage of that venture.
2.2. Attitudes
Allport (1954) stated that attitude was the most indispensable concept in social psychol-
ogy. Attitude has been dened in various ways, such as an inclination toward evaluation
of a class of objects (Sarnoff,1960). Greenwald (1989) has referred to it as a persons
disposition to respond favorably or unfavorably to a thing, person, place, or event
(Greenwald,1989). However one denes attitude, it has an impact on consumer behavior
(Perkins, Forehand, Greenwald and Maison, 2008). Attitudes speak to ones favorable or
unfavorable views of a person, place, thing, cultures and even businesses. Although some
researchers have reported a weak correlation between attitude and behavior (e.g., Bagozzi,
1978), others like Glasman and Albarracín (2006) have argued that attitudes indeed in-
uence behavior, especially when the information the attitude is formed on is one sided,
for instance, stereotypes. Consumersfavorable or unfavorable attitudes toward a specic
ethnic group may determine their likelihood to patronize a business establishment owned
by that ethnic group (Cummings,1980;Light and Rosenstein,1995;Wilson and Portes,
1980). Just as with our discussion of legitimacy above, it is unlikely that one would
Legitimacy, Attitudes and Intended Patronage
patronize a business that one has a negative attitude toward. More formally, we hypoth-
esize the following:
Hypothesis 2: Attitudes about an entrepreneur and his/her new venture startup are posi-
tively related to intended patronage.
2.3. Intended patronage of black- vs. white-owned rms
Liabilities of newness can be reduced by improving consumersperceptions of business
legitimacy, which in turn increases business patronage (Aldrich and Fiol,1994;Morse
et al.,2007). However, one issue for black entrepreneurs is that black enclaves in which
the majority of blacks in the United States live are usually located in inner cities and are
densely populated and inhabited by individuals in the lowest income quartile (Iceland,
Sharpe and Steinmetz, 2005). This fact is likely a result of how black enclaves formed in
the United States Black enclaves, unlike other ethnic enclaves, formed because of legal
exclusion of African Americans from patronizing mainstream businesses (Bates,2006),
while other enclaves formed in response to voluntary immigration of other ethnic groups.
In contrast to other ethnic groups who have used their ethnic enclaves in the United States
as starting points in their American journey, black enclaves have been home to generations
of some black families who have largely remained in poverty. This poses an obvious
problem for black entrepreneurs in that their customer base is not likely to have the same
wealth and income as other groups.
Ethnic enclaves provide business and employment opportunities for their residents that
otherwise would not be available to them in the larger society (Cummings,1999).
However, there have been arguments that slavery and continued discrimination in the
broadest terms may have deprived African Americans of acquiring entrepreneurial acu-
men, resulting in the lack of a black business tradition (Bristol,2004). In addition, negative
stereotypes and lower self-esteem are by-products of discrimination and may affect Af-
rican Americansethnic afliations and ethnocentric behaviors including consumer eth-
nocentrism (Greenwald and Banaji,1995; Negy, Shreve, Jensen and Uddin, 2003). In
some cases, minorities have been found to identify with dominant groups and take on the
negative stereotypes and prejudices toward them (Sarnoff,1960), thus perpetuating these
negative stereotypes. All of these factors above may result in unfavorable attitudes toward
African American entrepreneurs and preferential patronage of non-African American-
owned businesses. This is similar to consumerspreference of foreign goods over national
goods in some countries (Huddleston, Good and Stoel, 2001; Supphellen and Rittenburg,
Consistent with this view, in a study by Yoon (1991), Korean merchants in black
neighborhoods were found to specialize in ve lines of business, including beauty sup-
plies. Because of their access to capital through intra-ethnic economic linkages and other
sources, their beauty supply stores tended to be larger, pushing out smaller rms owned by
blacks in black neighborhoods (Lee,2000). Subsequently, beauty supply shops in these
neighborhoods became associated with Koreans because black consumers in these
neighborhoods were more likely to patronize beauty shops owned by Koreans. It is likely
M. N. Ogbolu, R. P. Singh & A. Wilbon
that black consumers viewed Koreans as having greater expertise in the beauty supply
business and/or had come to trust Korean beauty store owners and their products more
than they trusted co-ethnic black owners and their products (Ogbolu,2011).
Most ethnic enclave entrepreneurs have a concentrated trusting customer base of
co-ethnic consumers who view them as legitimate (Logan, Zhang and Alba, 2002; Model,
1985). This tends to allow enclave entrepreneurs to grow at a faster rate than entrepreneurs
in the wider market (Cummings,1999; Waldinger, 1983). The lower rates of entre-
preneurship and the higher rate of failure among black entrepreneurs suggest that they do
not enjoy the same perceptions of legitimacy by co-ethnic consumers as do other ethnic
groups. Legitimacy or street credibilityis a recognized point of reference in black
enclaves; it carries the power of believability and authenticity and is largely based on an
individuals reputation (Podoshen,2008). Lack of black business tradition (Bristol,2004)
has resulted in consumers, including co-ethnics, associating most successful businesses
with non-black entrepreneurs, such that it is difcult for black entrepreneurs to enter, thrive
in, or be successful in certain types of businesses (Ogbolu,2011). Because of this per-
ceived lack of legitimacy (at least from the consumerspoint of view), black entrepreneurs
are sometimes limited to certain types of businesses (mostly service types, for instance hair
salons and barber shops) that consumers have come to associate them with. Black
entrepreneurs who wish to start ventures in industries not typically associated with blacks,
such as high tech businesses, may have difculty establishing legitimacy.
Further, the collective impact of negative stereotypes, elevated crime rates in urban
areas, which tend to contain black enclaves and negative portrayals of blacks in the media,
are likely to inuence consumer attitudes in negative ways toward black entrepreneurs.
Research has shown that white customers tend to patronize white-owned establishments
(Quellet,2007). However, there is no strong evidence that black customers equally support
black entrepreneurs. In fact, there is some research to show that black consumers also seem
to prefer non-black owned businesses (Gregory,1973). It may be that they also hold the
same negative attitudes toward co-ethnic entrepreneurs.
Cummings (1999) argued that urban enclave markets are more limited than the
broader markets within the economy and that this is a possible reason black-owned
businesses in the black enclaves fail or do not perform as well as those outside the
enclave. We believe this is consistent with the idea that negative consumer attitudes and
low perceptions of legitimacy for black entrepreneurs and their rms exist. Toward this
end, Boston and Ross (1996) found that, in general, black-owned businesses located in
the lowest income areas (usually in the inner city) and the very highest income areas
tendedtobetheleastprotable. However, those located in the middle to upper middle-
income class areas (the suburbs) performed much better. This may be a result of reduced
negative stereotypes and higher self-esteem, perhaps because of higher educational at-
tainment and higher incomes of the black consumers and black entrepreneurs who may
live in these suburbs and the fact that whites are less likely to ascribe negative stereo-
types to blacks who live and work in their geographic proximity (Fairchild,2008).
Moreover, suburbanites are more likely to see themselves as sharing the same interests as
their neighbors, and they also see themselves as having similar incomes and education
Legitimacy, Attitudes and Intended Patronage
(Tallman and Morgner,1970). The problem for black entrepreneurs is that the percentage
of blacks who live in middle- and upper-class suburbs is low relative to the population of
all blacks in the United States.
Although co-ethnic consumers have consistently been found to support businesses
founded by entrepreneurs of similar racial backgrounds (Cashdan,2001;Cummings,1999;
Wilson and Portes,1980), we believe this may not be true for black-owned businesses.
Based on the above discussion regarding perceptions of lower legitimacy and negative
attitudes black entrepreneurs face, we believe black consumers will show no preference for
black-owned businesses, but that white consumers will show a preference for white-owned
businesses. More formally:
Hypothesis 3: Black consumers will have similar intentions to patronize new ventures
founded by black entrepreneurs as white consumers.
Hypothesis 4: White consumers will have higher intentions to patronize new ventures
founded by white entrepreneurs than black consumers.
3. Research Methods
3.1. Survey questionnaire and sample
Data were originally collected during a 52 day period between December 2010 and
January 2011. Participants were volunteer individuals who were approached by a data
collector at several different locations around a major east coast city and its suburbs.
Respondents were assured complete condentiality and the survey took about ten minutes
to complete.
The survey and data collection procedures received Institutional Review Board ap-
proval and the survey was pretested to check for appropriateness of the questions and the
chosen sample. There were two versions of the survey questionnaire that asked respon-
dents to answer questions about an entrepreneur and his new venture that was purported to
be in the process of being founded in the area. Both versions of the questionnaires
contained the same biological information (i.e., name, education and work experience)
about the entrepreneur and were the same except that the entrepreneur was represented by
two different pictures one was a white man and the other a black man. The pictures of
each man were similar in terms of smile, background and clothing. There was no reference
to race specically made on the questionnaire; the only differentiating factor between the
two questionnaires was the picture. Appendix A contains the brief bio sketch and pictures
of the two men used in the survey questionnaires.
Most of the questions were adapted from General Social Survey (GSS) questions, as
well as questionnaires utilized by Heatherton and Polivy (1991); Luhtanen and Crocker
(1992); Maxham and Netemeyer (2002); Newell and Goldsmith (2001) and Sweeney and
Soutar (2001). The items selected were used to measure the respondentsperceptions of
legitimacy, attitudes and intended patronage of the new venture (a restaurant) described in
the brief background sketch on the questionnaire. Although these subscales had previously
established reliability, a pilot test was used to establish the reliability of the total survey
M. N. Ogbolu, R. P. Singh & A. Wilbon
prior to full data collection. In addition, the questionnaire included demographic ques-
tions about the participants (e.g., age, race, gender, education, income levels). This design
is similar to that used in previous ethnicity-based research (e.g., Nesdale, Durkin, Maass
and Grifths, 2005; Shutts, Kinzler, Katz, Tredoux and Spelke, 2011; Stokes-Guinan,
2010; Clark and Clark,1947;Hraba and Grant,1970). The full questionnaire is not
contained in this paper, but is available upon request. However, the question items used
to measure legitimacy, attitudes and intended patronage are provided in Table 2later
in the paper.
Table 1summarizes the demographic characteristics of the 846 participants that made
up the respondent sample of the study. The mean age of the participants was just under
40 years. Most participants were female (59.4%). The participants were about evenly
distributed by race. Black participants constituted 50.8 percent (430) of the sample, while
white participants made up 49.2 percent (416) of the sample. Most participants had
completed high school and some post high school education (75.2%) and more than half of
the participants (55.7%) reported an annual income above $50,000.
3.2. Measures and statistical analyses
Hierarchical regression analyses were used to test the hypotheses in this study. Age,
education, income and gender were used as control variables. The full list of variables
included in the analyses follows:
LEGITIMACY This variable was calculated by adding up the responses for nine
5-point Likert-type question items in the survey instrument (see Table 2). The minimum
score was nine and the maximum was 45. The nine-item scale had an alpha of 0.88.
ATTITUDES This variable was calculated by adding up the responses for six 5-point
Likert-type question items in the survey instrument (see Table 2). For this variable, the
minimum score was six and the maximum was 30. The six-item scale had an alpha of 0.82.
Table 1. Respondent demographic characteristics.
Age (Years) Mean/SD Min-Max
39.4/17.2 18-88
Frequency Percent
Female 444 59.4
Male 303 40.6
Black 430 50.8
White 416 49.2
HS Diploma or Lower 209 24.8
Above High School 633 75.2
<$50,000 320 44.3
$50,000 or greater 402 55.7
N¼846* N varies because of missing data.
Legitimacy, Attitudes and Intended Patronage
INTENDED PATRONAGE This variable was calculated by adding up the
responses for two 5-point Likert-type question items (see Table 2). The minimum score
was two and the maximum was ten. The two-item scale had an alpha of 0.75.
Table 2provides the wording of the question items that made up the scales for the
above variables. All three scales demonstrated good reliability and validity, and have been
used in prior published research studies. However, reliability was re-examined for this
sample of participants and all scales demonstrated good reliability as demonstrated by the
Cronbachs alphas above 0.7.
AGE This variable is the age of the respondent in years. It was taken directly from
the survey.
EDUCATION This was a dummy coded variable, which measured whether
respondents had achieved any post high school education. Respondents who had gradu-
ated high school and pursued some college or post high school education were coded as
1. Those who had just a high school degree or less were coded as 0.
INCOME This was a dummy coded variable, which measured whether respondents
earned more than $50,000. Respondents who reported annual income at $50,000 or more
were coded as 1. Those who reported income below $50,000 were coded as 0.
RACE OF RESPONDENT This dummy variable identied the race the respondent.
This was taken directly from the survey. Only black and white respondents were included
in this study. Black respondents were coded as 1and white respondents as 0.
Table 2. Consumer perception scales: Reliability, mean and ranges.
No. Items αM/SD (Range)
Legitimacy Scale 9 0.88 30.2/6.1 (9-45)
Keith is prepared to start the business 3.5/1.0
Keith has the background to be a successful entrepreneur. 3.4/1.0
Keith has the appropriate experience to get the bank loan. 3.1/1.0
Keith knows how much he needs to invest in the business. 3.1/1.1
I would not expect any problems with Keiths restaurant. 2.8/1.1
The idea of Keith opening a restaurant in the area is appealing. 3.7/0.9
Keiths restaurant would perform well near my home. 3.3/1.0
Keiths restaurant would be well received by me 3.6/0.9
Keiths restaurant would be well received by people in my
Attitude Scale 6 0.82 23.1/3.8 (6-30)
I expect Keith will still be in business in 5 years. 3.3/1.0
I hope Keith is successful. 4.6/0.6
Keith seems like an interesting person. 3.8/0.9
Keith is a good role model for children in my neighborhood. 3.6/0.9
I would probably enjoy socializing with Keith. 3.5/0.9
If he is successful, people in my neighborhood are more likely to
have a good impression of him
Patronage Scale 2 0.75 8.5/1.4 (2-10)
I would try his restaurant if it is located in my neighborhood 4.1/0.8
If I liked the food and prices, I would recommend Keiths restaurant
to friends and relatives.
M. N. Ogbolu, R. P. Singh & A. Wilbon
RACE OF ENTREPRENEUR This dummy variable was coded the same as the
Race of Respondent variable. Respondents who lled out the survey with the picture of the
black entrepreneur were coded as 1and those with the picture of the white entrepreneur
as 0.
4. Results
Table 3details the results of descriptive statistics and correlations among the variables
used in the study.
To test Hypothesis 1 (Perceived legitimacy of an entrepreneur and his/her new venture
startup is positively related to intended patronage of that venture) and Hypothesis 2
(Attitudes about an entrepreneur and his/her new venture startup are positively related
to intended patronage), age, income, education and gender (control variables) were
rst regressed on intended patronage (see Model 1of Table 4). Then, legitimacy and
attitudes were entered into the regression model (see Model 2of Table 4). The control
variables in the rst step of the regression model did not signicantly explain any of the
variance in intended patronage. The only control variable that had a signicant re-
gression coefcient was age (β¼0:0708,p<0:05). This result indicates that with
age, respondents were less likely to patronize the new venture (restaurant) that was
being founded by the entrepreneur.
The next step of the analyses was testing the effects of the independent variables
legitimacy and attitudes on intended patronage. As seen in Table 4, both independent
variables were signicantly related to intended patronage (see Model 2 of Table 4).
Adding legitimacy and attitudes to the regression model resulted in an adjusted R2of
0.340 (F¼59:956,p<0:001). The standardized regression coefcients for legitimacy
(β¼0:257,p<0:001) and attitudes (β¼0:384,p<0:001) were both positive and
statistically signicant. One standard deviation change in legitimacy results in a 0.257
change in patronage, one standard deviation change in attitudes results in a 0.384 change
in patronage. These results provide strong support for Hypotheses 1 and 2.
To test Hypothesis 3 (Black consumers will have similar intentions to patronize new
ventures founded by black entrepreneurs as white consumers), a similar regression anal-
ysis as the one described above was conducted (see Table 5) except that we only tested the
respondents who were surveyed about the black entrepreneur (i.e., those who received the
survey with the picture of the black man). Once again, the control variables were rst
entered (see Model 1 of Table 5) into the regression analysis. Little variance was explained
and only the regression coefcient for education was signicant ( p<0:05). As seen in
Model 2 of Table 5, adding legitimacy and attitudes to the regression model resulted in an
adjusted R2of 0.287 (F¼23:896,p<0:001). The standardized regression coefcients
for legitimacy (β¼0:302,p<0:001) and attitudes ( β¼0:286,p<0:001) were both
positive and statistically signicant. The nal step of the regression analysis was exam-
ining the difference between black and white respondents in terms of intended patronage.
We expected no difference between black and white respondents in terms of their intended
Legitimacy, Attitudes and Intended Patronage
Table 3. Descriptive statistics and correlations.
Variable Mean SD 1 2 3 4 5 6 7 8 9
1. Age 39.44 17.25 1.00
2. Income 0.56 0.50 0.138*** 1.00
3. Education 0.75 0.43 0.026 0.347*** 1.00
4. Gender 0.41 0.49 0.012 0.030 0.082* 1.00
5. Legitimacy 30.32 6.13 0.014 0.161*** 0.200*** 0.017 1.00
6. Attitudes 23.14 3.72 0.028 0.106** 0.113*** 0.009 0.698*** 1.00
7. Intended Patronage 8.49 1.40 0.084* 0.047 0.064 0.000 0.484*** 0.528*** 1.00
8. Race of Respondent 0.49 0.50 0.310*** 0.032 0.019 0.095** 0.046 0.026 0.090** 1.00
9. Race of Entrepreneur 0.50 0.50 0.034 0.012 0.056 .035 0.171*** 0.244*** 0.136*** 0.047 1.00
*Signicant at p<0:05 level.
**Signicant at p<0:01 level.
***Signicant at p<0:001 level.
M. N. Ogbolu, R. P. Singh & A. Wilbon
patronage of the black entrepreneurs new venture and the results were as we expected
(β¼0:005). Thus, the results shown in Model 3 of Table 5provided support for
hypothesis 3.
The nal regression analysis tested the respondents who were surveyed about the white
entrepreneur (i.e., those who received the survey with the picture of the white man). The
results shown in Table 6strongly support hypothesis 4 which states that White consumers
will have higher intentions to patronize new ventures founded by white entrepreneurs than
black consumers. The control variables were insignicant (see Model 1 of Table 6), but
once again, the inclusion of legitimacy and attitudes greatly improved the regression
model. Including the two independent variables resulted in an adjusted R2of 0.368
(F¼34:332,p<0:001) and the standardized regression coefcients for legitimacy
(β¼0:201,p<0:001) and attitudes ( β¼0:462,p<0:001) were both positive and
statistically signicant (see Model 2 of Table 6). Clear support for hypothesis 4 can be
seen in Model 3 of Table 6. Entering race of respondents into the regression model
Table 5. Regression results for intended patronage of black-
owned businesses.
Variable Model 1 Model 2 Model 3
Beta Beta Beta
Age 0.049 0.098 0.100
Income 0.005 0.065 0.065
Education 0.133* 0.072 0.072
Gender 0.067 0.054 0.054
Legitimacy 0.302*** 0.302***
Attitudes 0.286*** 0.286***
Race of Respondent 0.005
F2.316 23.896*** 20.424***
Adjusted RSquare 0.015 0.287 0.284
*Signicant at p<0:05 level.
***Signicant at p<0:001 level.
Table 4. Regression results for intended patronage.
Variable Model 1 Model 2
Beta Beta
Age 0.077* 0.121***
Income 0.015 0.050
Education 0.043 0.026
Gender 0.008 0.005
Legitimacy 0.257***
Attitudes 0.384***
F1.403 59.956***
Adjusted RSquare 0.002 0.340
*Signicant at p<0:05 level.
***Signicant at p<0:001 level.
Legitimacy, Attitudes and Intended Patronage
improved the variance explained by nearly three percent (adjusted R2of 0.394,
F¼32:986,p<0:001), and the standardized regression coefcient was negative and
statistically signicant (β¼0:178,p<0:001), which points to the fact that white
respondents were statistically more likely to indicate they would patronize the white
entrepreneurs business than the black respondents.
5. Discussion
In this study, the theoretical relationships identied in the literature review were found to
be signicant based on the responses by our sample of participants. All four hypotheses
were supported as we found a clear link between intended patronage, perceptions of
legitimacy and attitudes toward the entrepreneur and his rm. More specically, re-
gardless of the race of the entrepreneur, higher legitimacy and attitude scores were found
to be positively related to intended patronage. Quellet 2007 showed that because the
United States is largely multi-cultural/multi-ethnic, each ethnic group exhibits a signi-
cant preference for its own ethnic products or businesses (Quellet,2007). It seems this
was the case for the white entrepreneur, who had a distinct advantage in terms of
expected patronage of his new venture by white respondents, and not for the black
entrepreneur, who was not favored by co-ethnic respondents. With respect to the rst
nding, the scales we used to measure legitimacy and consumer attitudes showed very
good reliability and were signicant factors in explaining 34 percent of the variance in
intended patronage of the projected new ventures in our study. By itself, we believe this
is a signicant research contribution; however, there were differences in the ways in
which these variables impacted intended patronage of black- vs. white-owned new
ventures. In total, the inclusion of legitimacy, attitudes and race of the respondents in the
regression model explained nearly 40 percent of the variance for intended patronage
of the white entrepreneurs new venture. This compares with just 28.4 percent of the
variance for the black entrepreneur.
Table 6. Regression results for intended patronage of white-
owned businesses.
Variable Model 1 Model 2 Model 3
Beta Beta Beta
Age 0.078 0.132** 0.085
Income 0.036 0.039 0.023
Education 0.030 0.108* 0.104*
Gender 0.066 0.056 0.077
Legitimacy 0.201*** 0.230***
Attitudes 0.462*** 0.453***
Race of Respondent 0.178***
F1.138 34.332*** 32.986***
Adjusted RSquare 0.002 0.368 0.394
*Signicant at p<0:05 level.
**Signicant at p<0:01 level.
***Signicant at p<0:001 level.
M. N. Ogbolu, R. P. Singh & A. Wilbon
Given the fact the information about the new venture and the background of the
entrepreneurs that was given to survey respondents was exactly the same except the
pictures of the entrepreneurs, there should be no difference in the intended patronage
levels of the new ventures that respondents were asked about. Obviously, this was
not the case and understanding the eleven percent gap in variance explained in
intended patronage may help us better understand the unique challenges facing black
One might immediately jump to the conclusion that this is a case of simple discrimi-
nation and overt racism, but we believe it is far more complex than that. Our results
showed that while white entrepreneurs were more likely to be supported by their co-ethnic
white consumers, the same was not the same for black entrepreneurs. This points to a
subtle, but clearly negative issue for black entrepreneurs. If the difference could be tied
simply to racism then we would still expect black consumers to support black entrepre-
neurs more than white consumers do, but that is not the case.
Ethnic identity confers certain important business resources on ethnic enclave busi-
nesses such as market penetration and power, tight-knit nancial and social networks, and
enhanced ethnic bond and loyalty, which ultimately strengthen consumer allegiance to
ethnic ventures (Light and Rosenstein,1995). Ethnic solidarity or ethnocentrism promotes
a collective approach to business development (Cummings,1980). In other words, the
success of ethnic enclave businesses is often dependent on the degree of consumer eth-
nocentrism exhibited by co-ethnics. The stronger the consumer ethnocentrism exhibited by
co-ethnics in an ethnic enclave, the greater the likelihood of entrepreneurial entry by co-
ethnics, and of success by ethnic enclave businesses. We believe the nding that black
consumers do not show any preference for black entrepreneurs is consistent with the
negative reasons we discussed in the literature review (e.g., stereotypes, lower self-esteem,
reactions to discrimination). However, this was not directly tested and future research is
A closer inspection of the results suggests that perceptions of legitimacy were more
important for black entrepreneurs than attitudes. For white entrepreneurs the importance of
these variables is reversed. This may be because of the lack of business tradition (Bristol,
2004) and higher failure rates (Fairlie and Robb,2007) of black entrepreneurs, which
makes consumers take more of a wait and seeattitude. They may be more concerned
about performance or ability to deliver for black entrepreneurs than they are for white
entrepreneurs. White entrepreneurs may already enjoy consumer perceptions that their
rms are legitimate or they are qualied and able to conduct whatever business they
engage in. In other words, their ability to perform is not really questioned in the same way
as black entrepreneurs.
6. Limitations
There are a number of limitations that must be acknowledged. First, in this study, ques-
tions were asked about a hypothetical entrepreneur starting just one type of business
(a restaurant). It would be better to study real entrepreneurs operating in various industries.
Legitimacy, Attitudes and Intended Patronage
Further, this is a cross-sectional entrepreneurship study that was limited to two racial/
ethnic groups in the United States. Cross-sectional studies represent only one point in time
and cannot be used to establish cause and effect relationships. The study was implemented
in a relatively small area, one state, within the United States. In addition, the implemen-
tation of this study offered some unique challenges. Because this study had some racial/
ethnicity components, which can be controversial, responses may have been inuenced by
social desirability response biases. People are often sensitive to ethnic/racial discussions
and questions. Although the study design and data collection procedure did not explicitly
draw attention to the race of the entrepreneur, there were clearly differences in the intended
patronage scores achieved by the businesses that were to be founded by the black and the
white entrepreneur. Whether this was because of positive factors such as white support for
the co-ethnic white entrepreneurs or negative factors such as discrimination and racism
cannot clearly be determined.
7. Future Research Directions
Future research should address the limitations discussed above. Replication studies in
other geographic areas and using real entrepreneurs from different demographic groups in
various industries should be conducted. In the future, longitudinal studies of real en-
trepreneurial ventures should be conducted to establish if indeed attitudes and legitimacy
predict intended patronage and actual patronage. In such a study, follow-up surveys
should be given to participants during the study period to determine if and how their
responses change over time. Results from a longitudinal study would more accurately
explain the factors that predict patronage of black-owned businesses versus white-owned
Although there are challenges involved in using real businesses, such as controlling
for quality, service and pricing which were not required with the present research
method careful selection of business establishments for comparison could yield in-
valuable insight and provide more generalizable results. In addition, studying real entre-
preneurs and their rms may minimize social desirability response bias because the
researcher would actually observe respondents as they go in and out of the selected
business establishments. In addition, different types of businesses should be studied to
determine if differences exist between black-owned and white-owned businesses con-
cerning how consumer perceptions impact patronage.
Other data collectors of different race/ethnicity, gender and age may be used in different
settings. The use of different data collectors may facilitate data collection efforts from
participants of varied demographics. In addition, this study can also be implemented in an
anonymous manner. For instance, the Internet can be used to ensure that study partici-
pantsresponses are not biased because of the presence of the researcher. Individuals are
more likely to respond honestly when they believe there is total anonymity, such as that
provided by the Internet (Nosek, Banaji and Greenwald, 2002a,b). This study can also be
expanded to include businesses that are owned by people with different demographics.
Because the United States is made up of more than blacks and whites, future research
M. N. Ogbolu, R. P. Singh & A. Wilbon
could include entrepreneurs of other races/ethnic groups. Moreover, gender and age dif-
ferences may exist in consumer perceptions; therefore, for future research, the gender and
age of the entrepreneurs can also be manipulated to determine if differences based on age
and gender exist. Finally, a cross-country study could also be implemented to compare
results from different countries, especially a country like South Africa, which in the past
had institutionalized racial discrimination like the United States.
8. Conclusions
In conclusion, the reason for the persistent low rate of black participation in entre-
preneurship is not fully understood. Although researching black entrepreneurs and their
circumstances such as education, nances, family dynamics is helpful, these studies
do not fully explain the state of black entrepreneurship. Because consumers are central
to successful entrepreneurship, a closer examination of their impact is warranted
because this can help further illuminate the importance of certain variables such as
attitudes and legitimacy, and their relationship with patronage and ultimately successful
The limitations notwithstanding, this paper empirically demonstrates that attitudes and
legitimacy have strong positive relationships with intended patronage. Furthermore,
ndings show that although legitimacy has a stronger relationship with and may better
predict intended patronage for black-owned businesses, attitudes has a stronger relation-
ship with and may better predict intended patronage for white-owned businesses. Although
this research is in its early stages, it may be worthwhile for black entrepreneurs to strive to
improve the legitimacy perceptions of their businesses and for white entrepreneurs to be
seen in a favorable light by consumers.
Another important nding is that whites more than blacks were more likely to have an
intention to patronize white-owned businesses, showing high consumer ethnocentrism.
The ndings did not show that blacks felt the same way about new ventures founded by
co-ethnic entrepreneurs. This demonstrates the lower level of consumer ethnocentrism
among blacks. Further exploration of the reasons for this signicant difference may be key
to understanding additional dynamics involved in black entrepreneurship that are not well
understood. We hope this paper introduces readers to new concepts, which can be further
studied to better understand the challenges facing black entrepreneurs. Much work remains
to be done.
Appendix A. Text of Bio Sketch of the Entrepreneur on the Questionnaire
The following text appeared at the beginning of the survey instrument as well as a picture
of the entrepreneur. For half the respondents the picture was of a black man, the other half
received a picture of a white man.
Keith is 33 years old. He has worked in the restaurant industry as a waiter for the past
8 years. Keith has also taken some college classes in business and hospitality management,
and is planning to open a family-style restaurant in your neighborhood. Keith has written a
Legitimacy, Attitudes and Intended Patronage
business plan and is currently seeking a suitable location for his restaurant. He is also
attempting to secure a bank loan so he can start his business within the next year.
Aldrich, H and M Fiol (1994). Fools rush in? The institutional context of industry creation. The
Academy of Management Review, 19(4), 64570.
Allport, GW (1954). The Nature of Prejudice. Cambridge, MA: Addison-Wesley.
Bagozzi, R (1978). Salesforce performance and satisfaction as a function of individual difference,
interpersonal and situational factors. Journal of Marketing Research, 15, 517531.
M. N. Ogbolu, R. P. Singh & A. Wilbon
Bates, T (1997). Race, Upward Mobility, and Self-Employment: An Illusive American Dream.
Baltimore, MD: Johns Hopkins University Press.
––– (2006). The urban development potential of black-owned businesses. Journal of American
Planning Association, 72(2), 227237.
Bristol, D (2004). From outposts to enclaves: A social history of black barbers 17501915. Enter-
prise and Society, 5(4), 594606.
Boston, T and C Ross (1996). Location preference of successful black-owned businesses in Atlanta.
The Review of Black Political Economy, 24(23), 337357.
Cashdan, E (2001). Ethnocentrism and xenophobia: A cross-cultural study. Current Anthropology,
42(5), 760765.
Clark, K and M Clark (1947). Racial identication and preference in negro children. In Readings in
Social Psychology, Newcomb, T and E Hartley (eds.). New York: Holt.
Child, J and G Mollering (2003). Contextual condence and active trust development in the Chinese
business environment. Organizational Science, 14, 6980.
Crump, MES (2008). A Survey of the Literature on Black Entrepreneurship: What is Known, Who
is Publishing and Future Research Directions. Ph.D. dissertation, Morgan State University.
Cummings, S (1980). Self-Help in Urban America. New York: Kennikat Press Corp.
––– (1999). Black entrepreneurship in the suburbs: Protected markets and enclave business devel-
opment. Journal of the American Planning Association, 65(1), 5061.
Dollinger, M (2003). Entrepreneurship: Strategies and Resources (3rd ed.). Englewood Cliffs,
NJ: Prentice-Hall.
Fairchild, G (2008). Residential segregation inuences on the likelihood of black and white self-
employment. Journal of Business Venturing, 23(1), 4674.
Fairlie, RW (1999). The absence of the African-American-owned businesses: An analysis of the
dynamics of self-employment. Journal of Labor Economics, 17(1), 80108.
––– (2004). Recent trends in ethnic and racial business ownership. Small Business Economics, 23(3),
Fairlie, RW and AM Robb (2007). Why are black-owned businesses less successful than white-
owned businesses? The role of families, inheritances and business human capital. Journal of
Labor Economics, 25(2), 289323.
Glasman, L and D Albarracín (2006). Forming attitudes that predict future behavior: A meta-analysis
of the attitude-behavior relation. Psychological Bulletin, 132(5), 788822.
Gounaris, S (2005). Trust and commitment inuences on customer retention: Insight from business
to business services. Journal of Business Research, 58, 126140.
Greene, P and J Butler (2004). The minority community as a natural business incubator. In Immi-
grants and Minority Entrepreneurship, Butler, J and G Kozmetsky (eds.), 10722. Westport,
CT: Praeger Publishers.
Greenwald, AG (1989). Why are attitudes important? In Attitude Structure and Function,AR
Pratkanis, SJ Breckler and AG Greenwald (eds.), 110. Hillsdale, NJ: Erlbaum.
Greenwald, AG and MR Banaji (1995). Implicit social cognition: Attitudes, self-esteem and ste-
reotypes. Psychology Review, 102(1), 427.
Gregory, K (1973). Brief report of the state of the black economy. Review of Black Political
Economy, 3(3), 316.
Hannan, and Freeman (1984). Structural inertia and organizational change. American Sociological
Review, 49(2), 149164.
Heatherton, T and J Polivy (1991). Development and validation of a scale for measuring state of self-
esteem. Journal of Personality and Social Psychology, 60(6), 895910.
Hisrich, RD and MP Peters (2002). Entrepreneurship (5th ed.). New York, NY: McGraw-Hill/Irwin.
Hout, M and H Rosen (2000). Self-employment, family background and race. The Journal of Human
Resources, 35(4), 670692.
Legitimacy, Attitudes and Intended Patronage
Hraba, J and G Grant (1970). Black is beautiful: A re-examination of racial preference and identi-
cation. Journal of Personality and Social Psychology, 16(3), 398402.
Huddleston, P, LK Good and L Stoel (2001). Consumer ethnocentrism, product necessity and Polish
consumersperception of quality. International Journal of Retail and Distribution Manage-
ment, 29(5), 236246.
Iceland, J, C Sharpe and E Steinmetz (2005). Class differences in African American residential
patterns in U.S. metropolitan areas: 19902000. Social Science Research, 34, 252266.
Lee, J (2000). Immigrant and black competition: Jewish, Koreans and black entrepreneurs. In Im-
migration Research for a New Century: Multidisciplinary Perspectives, N Foner, R Rumbaut
and S Gold (eds.), 322343. New York: Russell Sage Foundation.
Light, I (1972). Ethnic Enterprise in America: Business and Welfare Among Chinese, Japanese, and
Blacks. Berkley, CA: University of California Press.
Light, I and C Rosenstein (1995). Race, Ethnicity, and Entrepreneurship in Urban America. New
York: Aldine De Groyter.
Logan, J, W Zhang and R Alba (2002). Immigrant enclaves and ethnic communities in New York
and Los Angeles. American Sociological Review, 67(2), 299322.
Luhtanen, R and J Crocker (1992). A collective self-esteem scale: Self-evaluation of ones social
identity. Personality and Sociology Bulletin, 18(3), 302318.
Maxham, J and R Netemeyer (2002). Modeling customer perceptions of complaint handling over time:
The effects of perceived justice on satisfaction and intent. Journal of Retailing, 78, 239252.
Model, S (1985). A comparative perspective on the ethnic enclave: Blacks, Italians and Jews in New
York City. The International Migration Review, xix(1), 6481.
Morse, E, S Fowler and T Lawrence (2007). The impact of virtual embeddedness on new venture
survival: Overcoming the liabilities of newness. Entrepreneurship Theory and Practice, 31(2),
Negy, C, T Shreve, B Jensen and N Uddin (2003). Ethnic identity, self-esteem and ethnocentrism: A
study of social identity versus multicultural theory of development. Cultural Diversity and
Ethnic Minority Psychology, 9(4), 333344.
Newell, S and R Goldsmith (2001). The development of a scale to measure perceived corporate
credibility. Journal of Business Research 52(3), 235347.
Nosek, B, M Banaji and AG Greenwald (2002a). E-research: Ethics, security, design and control in
psychological research on the Internet. Journal of Social Issues, 58(1), 161176.
––– (2002b). Harvesting implicit group attitudes and beliefs from a demonstration website. Group
Dynamics, 6, 110115.
Ogbolu, MN (2011). Exploring the Depressed Rate of Black Entrepreneurship: The impact of
Consumer Perceptions. Ph.D. dissertation, Morgan State University.
Perkins, A, M Forehand, AG Greenwald and D Maison (2008). Measuring the non-conscious:
Implicit social cognition on consumer behavior. In Handbook of Psychology, Haugtvedt, C, P
Herr and F Kardes (eds.), 46175. Hillsdale, NJ: Lawrence Erlbaum Associates.
Podoshen, J (2009). Distressing events and future purchase decisions: Jewish consumers and the
Holocaust. Journal of Consumer Marketing, 26(4), 263276.
Quellet, J (2007). Consumer racism and its effects on domestic cross-ethnic product purchase: An
empirical test in the United States, Canada and France. Journal of Marketing, 71, 113128.
Sarnoff, I (1960). Psychoanalytic theory and social attitudes. Public Opinion Quarterly, 24(2),
Scarborough, NM and TW Zimmerer (2005). Effective Small Business Management: An Entrepre-
neurial Approach (8th ed.). Upper Saddle River, NJ: Prentice Hall.
Singh, RP, MES Crump and X Zu (2009). Family matters: Examining how self-employed blacks and
whites differ in having self employed parents. In P. Carrington, Entrepreneurship and Its
Economic Signicance, Behavior and Effects,120. New York: Nova Science Publishers.
M. N. Ogbolu, R. P. Singh & A. Wilbon
Stinchcombe, A (1965). Social structure and organizations. In Handbook of Organizations, March,
J (ed.), 142193. Chicago: Rand McNally.
Supphellen, M and TL Rittenburg (2001). Consumer ethnocentrism when foreign products are better.
Psychology and Marketing, 18(9), 907927.
Sweeney, J and G Soutar (2001). Consumer perceived value: The development of a multiple item
scale. Journal of Retailing, 77(2), 203220.
Tallman, I and R Morgner (1970). Life-style differences among urban and suburban blue-collar
families. Social Forces, 48(3), 334348.
Waldinger, R (1993). The ethnic enclave debate revisited. International Journal of Urban and
Regional Research, 17(3), 444452.
Wilson, K and A Portes (1980). Immigrant enclaves: An analysis of the labor market experiences of
Cubans in Miami. The American Journal of Sociology, 86(2), 295319.
Yoon, I (1991). The changing signicance of ethnic and class resources in immigrant businesses:
The case of Korean immigrant businesses in Chicago. The International Migration Review,
25(2), 303332.
Zarkada-Fraser, A and C Fraser (2002). Store patronage prediction for foreign-owned supermarkets.
International Journal of Retail and Distribution Management, 30(6/7), 282299.
Legitimacy, Attitudes and Intended Patronage
... In particular, it is found that consumer preference (Ogbolu et al., 2015;Kuppuswamy and Younkin, 2020) and financing barriers caused by lending discrimination are key factors encountered by many minority entrepreneurs (Ekanem and Wyer, 2007;Roomi et al., 2009;Gill and Biger, 2012;Sandhu et al., 2012;Bewaji et al., 2015;Howell, 2019), although studies on consumer price discrimination for minority entrepreneurship are limited. Only a handful of scholars, such as Younkin and Kuppuswamy (2019), have investigated consumers' discrimination against minority businesses. ...
... It is generally accepted that consumers' business decisions are closely related to their trust in a business establishment (Child and Mollering, 2003;Gounaris, 2005). Ogbolu et al. (2015) argue that consumers have different perceptions of minority and non-minority entrepreneurs, which can affect patronage of firms. For example, attitudes from consumers affect black entrepreneurs whose businesses may suffer due to the effects of negative stereotypes held about African Americans (Fairchild, 2008). ...
... Most employers across industries hold that the locus of bias exists not within the organization, but rather, comes from the consumers who patronize the organization (Kuppuswamy and Younkin, 2020). Consumers tend to be cautious about what and from whom they buy, and are often concerned about being exploited by new or unfamiliar businesses (Ogbolu et al., 2015). In some cases, cross-racial interactions between consumers and minorities may make customers feel uncomfortable. ...
Full-text available
Many prior studies on minority entrepreneurship have found that some consumers display a strong bias against products from minority ventures. Not surprisingly, discrimination against products sold by minority-owned businesses increases the failure rate for such ventures. This paper seeks to verify the extent of consumer discrimination for minority products, and investigates whether it varies among different products. Building on insights from the theory of consumer discrimination, we conducted a comparative behavior experiment on 155 subjects for the expected pricing of two new products (common products and products with ethnic characteristics). Consistent with prior literature, we found that potential consumers held a bias against common products from minority ventures and offered a lower price. However, the theory of consumer discrimination could not be applied to the products with ethnic characteristics. Instead, potential consumers viewed ethnic characteristics products from minority ventures as being high quality and offered higher prices. This finding complements the theory of consumer discrimination and provides useful knowledge for minority entrepreneurs: minority entrepreneurs can employ price discrimination to strengthen the ethnic brand’s impression by integrating ethnic cultural features into new products.
... In each of the experiments (for both US and Iran), similar to previous research on customers' evaluation of entrepreneurs (e.g. Nagy et al., 2012;Ogbolu et al., 2015), participants were randomly assigned to evaluate a written scenario of a woman entrepreneur in one of the two experimental conditions. In one condition, the woman entrepreneur was described as having masculine characteristics and in the other condition she was described as having feminine characteristics. ...
Purpose Does gender stereotype endorsement play a role in the customer's cognitive evaluation of new ventures owned by women entrepreneurs? The authors’ cross-cultural study integrates literature on gender stereotype endorsement and cognitive legitimacy to address this research question. Design/methodology/approach The authors use a two-study experimental design and analyze our results by cultural context to test our hypotheses: one drawn from college students in Iran and one from working professionals in the United States. Findings The authors’ comparative results suggest that the evaluation of feminine versus masculine characteristics of women entrepreneurs varies depending on the evaluator's (in this case the customer's) endorsement of gender stereotypes and the cultural context. Specifically, the authors found that a new venture owned by a woman entrepreneur who displays feminine characteristics is perceived as more legitimate when the customer endorses feminine stereotypes, regardless of the country. Research limitations/implications The authors’ research contributes to the literature on cognitive legitimacy and women's entrepreneurship by unveiling the cultural conditions and factors that allow women entrepreneurs to benefit from acting in a stereotypically feminine way. The authors use a binary approach to gender. Future research should extend our findings to also include a non-binary approach. Originality/value This study contributes to women's entrepreneurship research by unraveling the implications of gender stereotype endorsement, legitimacy and culture in customer evaluation of ventures owned by women.
... Other research on minority entrepreneurship finds that representation of minorities in business ownership, growth and success are low due in part to some major barriers of entry into the field. It is also clear that MOBs face more challenges and problems, and to a greater extent, than the non-minority businesses (Bates, 2011;Adkins & Samaras, 2013;Barr, 2015;Ogbolu, 2015). ...
... In the U.S., beauty supply shops that sell these extensions are commonly owned by Korean immigrants (Ogbolu, 2015;Ogbolu et al., 2015;Shin, 2014;Taylor et al., 2016). Women who purchase these products are for the most part African American citizens, but they often carry them to their African or Caribbean hair dresser. ...
This chapter analyzes government and HBCU action on improving rates of black entrepreneurship in the United States. Small Business Development Centers help citizens and residents become better entrepreneurs and successful business owners, and are located throughout the United States with some being located on HBCU campuses. This study responds to a 25-year declining trend noticed by Fairlie and Desai (2021) in the numbers of Americans, including black Americans, who are becoming entrepreneurs out of necessity as opposed to in response to discovering an entrepreneurial opportunity. Using regression analysis, the study analyzes data sample size of more than 45,000 entrepreneurs across 50 states and in Washington, DC in the Kauffman Early-Stage Entrepreneurship (KESE) dataset. Findings indicate that SBDCs located at HBCUs correspond to drastic increases in black opportunity entrepreneurship as opposed to necessity entrepreneurship in comparison to white and non-white minorities. Implications and suggestions are provided to HBCUs, PBIs, and government policymakers.
Full-text available
Now organizations are always vulnerable to the liabilities of newness, but such pressures are especially severe when an industry is in its formative years. We focus on one set of constraints facing entrepreneurs in emerging industries-their relative lack of cognitive and sociopolitical legitimacy. We examine the strategies that founders can pursue, suggesting how their successful pursuit of legitimacy may evolve from innovative ventures to broader contexts, collectively reshaping industry and institutional environments.
This article contributes to the growing literature maintaining that the ethnic enclave represents a distinct, third alternative to a dual economy. The data are interviews with 45 elderly, immigrant blacks, Jews and Italians from New York City. Two facets of the enclave are explored: determinants of job outcomes for employees and factors responsible for entrepreneurial viability. With regard to employees, the analysis shows enclave workers obtain job security and job status equivalent to openings in the primary sector. Investigation of the organization of ethnic entrepreneurship reveals that the mobilization of several factors unique to ethnicity enhances the competitiveness of minority firms.
Respondents at an Internet site completed over 600,000 tasks between October 1998 and April 2000 measuring attitudes toward and stereotypes of social groups. Their responses demonstrated, on average, implicit preference for White over Black and young over old and stereotypic: associations linking male terms with science and career and female terms with liberal arts and family. The main purpose was to provide a demonstration site at which respondents could experience their implicit attitudes and stereotypes toward social groups. Nevertheless, the data collected are rich in information regarding the operation of attitudes and stereotypes, most notably the strength of implicit attitudes, the association and dissociation between implicit and explicit attitudes, and the effects of group membership on attitudes and stereotypes. (PsycINFO Database Record (c) 2013 APA, all rights reserved)
Blue-collar couples from a working-class suburb and from a working-class urban district are compared on a number of life-style variables. Suburban families are more likely than urban families to adopt life-styles resembling the middle class as indicated by measures of local intimacy, social isolation, family organization, church activity, orientations to social mobility and political perspectives. Controls for background variables and social-class identification do not appreciably alter these relationships. The analyses also reveal differential adaptations by husbands and wives to suburban residence—thus illustrating some of the problems in generalizing from findings that do not systematically account for sex of respondents. In conjunction with previous research the findings underline a need to reassess the frequently reported assumption that class values are the prime determinants of life-style regardless of residence.
Race, Self-Employment, and Upward Mobility refutes conventional notions about entrepreneurship with a wealth of unimpeachable data. Timothy Bates finds that self-employment and upward mobility are open to those who are highly educated and skilled, often possessing significant personal financial resources. This is true among Asian Americans, African Americans, and everybody else, too. Asian immigrants are prominent in low-profit, high-risk small-scale inner-city retailing, Bates explains, because they are often pushed into it by poor English language skills and problems of credentialing-when they can secure other employment, they do so. African Americans, in contrast, who have the education, capital, and inclination to become entrepreneurs find better-paying opportunities and avoid ghetto shopkeeping. Bates compares black and Asian self-employment. He reviews who becomes self-employed, what factors encourage continuing self-employment, and how people escape unsuccessful self-employment. He addresses the place of entrepreneurship in upward mobility among disadvantaged persons and the role of government in assisting them. Bates's analysis is based largely on the massive Characteristics of Business Owners survey compiled by the U.S. Census Bureau, which provides nationwide information on small business success and survival patterns. This book is an important contribution to the economic and sociological literature on ethnic groups and labor. It belongs in all libraries with extensive holdings in economics and sociology. In paperback, it can be used in upper division and graduate level courses.
It has been shown (25, 27, 28, 29, 82) that at each age level from three years through seven years, Negro children have a well developed knowledge of the concept of racial difference between “white” and “colored” as this is indicated by the characteristic of skin color-and that this knowledge develops more definitely from year to year to the point of absolute stability at the age of seven. It was further shown that the dynamics of self-identification in medium and dark-skinned children is somewhat different and more stable than in light-skinned children. There were no significant differences between Northern and Southern children in the awareness of racial differences.
The author presents a model designed to explain the performance, job satisfaction, and other behavioral outcomes experienced by salespeople. By building on the model of man proposed by Lewin and modern interactionist and social learning theories of personality, the behavior of salespeople is shown to be a function of the person, the interactions the person has with significant others in his or her role set, and forces in the situation. Hypotheses are tested on data gathered on industrial salespeople.