@techreport{Fairlie2004Black,
abstract = {Four decades ago, Nathan Glazer and Daniel Patrick Moynihan made the argument that the
black family "was not strong enough to create those extended clans that elsewhere were
most helpful for businessmen and professionals." Using data from the confidential and
restricted access Characteristics of Business Owners Survey, we investigate this hypothesis
by examining whether racial differences in family business backgrounds can explain why
black-owned businesses lag substantially behind white-owned businesses in sales, profits,
employment size and survival probabilities? Estimates from the CBO indicate that black
business owners have a relatively disadvantaged family business background compared with
white business owners. Black business owners are much less likely than white business
owners to have had a self-employed family member owner prior to starting their business and
are less likely to have worked in that family member's business. We do not, however, find
sizeable racial differences in inheritances of business. Using a nonlinear decomposition
technique, we find that the relatively low probability of having a self-employed family member
prior to business startup among blacks does not generally contribute to racial differences in
small business outcomes. Instead, the lack of prior work experience in a family business
among black business owners, perhaps by limiting their acquisition of general and specific
business human capital, negatively affects black business outcomes. We also find that
limited opportunities for acquiring specific business human capital through work experience in
businesses providing similar goods and services contribute to worse business outcomes
among blacks. We compare these estimates to contributions from racial differences in
owner's education, startup capital, geographical location and other factors.},
author = {Robert W. Fairlie and Alicia M. Robb},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {J23; J15; 330; business outcomes; race; family; self-employment; Selbstst\"{a}ndige; Farbige Bev\"{o}lkerung; Weisse; Unternehmensentwicklung; Familiensoziologie; Erbe; Humankapital; Unternehmer; Sch\"{a}tzung; Vereinigte Staaten},
language = {eng},
number = {1292},
title = {Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? : The Role of Families, Inheritances, and Business Human Capital},
type = {IZA Discussion paper series},
url = {http://hdl.handle.net/10419/20558},
year = {2004}
}
