Characteristics of Black-Owned Corporations in Atlanta: With Comments on the Smobe Undercount

Abstract

Black-owned corporations are only 3 percent of all black-owned businesses in the nation, but account for almost half of all revenue and employment of these businesses. Even though their rate of growth greatly exceeds that of proprietorships and partnerships, very little is known about the characteristics of black-owned corporations. The Survey of Minority-Owned Business Enterprises (SMOBE) is published every five years by the Department of Commerce and is the most comprehensive source of information on black-owned businesses. Yet, most researchers fail to realize that this survey does not include all corporations in its survey universe, but only 1120 S corporations. This study uses primary data collected on 722 of the most successful black-owned businesses in the Atlanta metropolitan area. We analyze the characteristics of black-owned corporations and the human capital attributes of their owners, and we comment on the SMOBE undercount of 1120 subchapter C corporations. We find that in Atlanta, not only do black-owned subchapter C corporations greatly outnumber S corporations, but they also have a much greater financial capacity.