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The Causes And Dynamics Of Minority Entrepreneurial Entry

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  • CATHY YANG LIU

    (Andrew Young School of Policy Studies, Georgia State University, P.O. Box 3992, Atlanta, GA 30303, USA)

Abstract

This study examines the causes and dynamics in the creation of business ventures by minority nascent entrepreneurs. Minority business enterprises are an important source of job creation and innovation in the US economy, as well as economic development engines in their respective communities. However, little is understood about the unique motivations, business strategies and plans in the early stage of their venture formation. This paper utilizes the Panel Study of Entrepreneurial Dynamics (PSED) dataset in investigating black and Hispanic entrepreneurial entry as compared to white nascent entrepreneurs around three important dimensions: motivation, business strategy, and community resources. It is found that blacks are highly driven by a range of motivational factors while Hispanics value intergenerational inheritance and role models in business ownership. Both groups heavily focus on a niche market strategy by lowering prices, serving markets missed by others and locating close to customers. Contrary to expectation, their perceptions of community resources are not more favorable than whites. Public policy implications are discussed.

Suggested Citation

  • Cathy Yang Liu, 2012. "The Causes And Dynamics Of Minority Entrepreneurial Entry," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 17(01), pages 1-23.
    • Handle: RePEc:wsi:jdexxx:v:17:y:2012:i:01:n:s1084946712500033
    DOI: 10.1142/S1084946712500033
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    References listed on IDEAS

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    1. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    2. Michaelides, Marios & Benus, Jacob, 2012. "Are self-employment training programs effective? Evidence from Project GATE," Labour Economics, Elsevier, vol. 19(5), pages 695-705.
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    Cited by:

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    2. Cathy Yang Liu & Xi Huang, 2016. "The Rise of Urban Entrepreneurs in China: Capital Endowments and Entry Dynamics," Growth and Change, Wiley Blackwell, vol. 47(1), pages 32-52, March.
    3. Craig Wesley Carpenter & Scott Loveridge, 2020. "Business, Owner, and Regional Characteristics in Latino-owned Business Growth: An Empirical Analysis Using Confidential Census Microdata," International Regional Science Review, , vol. 43(3), pages 254-285, May.

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