African-American economic development and small business ownership.

摘要

After many years of progress, the disparity between the economic status of African Americans and whites now appears to be widening. Business ownership is an approach that has been advanced by policymakers for over 25 years as a means for African Americans to further their economic welfare, but it is essential to understand the factors that affect the success of small, African American firms in order to shape public policy effectively.; Previous studies have examined such factors and found that the initial financial capital investment is an important determinant of success for African American firms. The limitation of these studies is that they analyzed African American businesses in the aggregate.; This study improves on previous research by analyzing factors related to business success by industry and region. The primary research question is whether start-up capital, education, and managerial experience are significantly related to the survival of African American firms when businesses are disaggregated by industry. Four industry groups were examined: professional services; finance, insurance, and real estate (FIRE); manufacturing; and wholesale trade. The data were disaggregated by state to determine whether local economic factors were associated with success.; The source of data used for this study was the 1987 Characteristics of Business Owners database compiled by the U.S. Bureau of the Census. Logistic regression analysis was used to identify the factors associated with business viability. The results of the analysis show that, for each of the four industry groups, start-up capital and possession of a college degree are significantly related to survival of the sample of African American firms. Managerial experience is also significantly related to the survival of wholesale trade and manufacturing, but not of professional services and FIRE industries.; These findings led to the recommendation that public policy should support the development of start-up capital for entrepreneurs, facilitate African American enrollment in and graduation from college, and provide college students and recent graduates with business internships that offer managerial experience.