Does Greater Visibility Benefit Minority Businesses? Evidence from an Online Review Platform

Abstract

In the wake of the Black Lives Matter protests, numerous companies took action to advance racial equality. Several online platforms added a feature that identified “minority-owned” businesses to help users locate and, thus, support them. In this study, we investigate how reviews and ratings of restaurants in New York City change after being identified as Black-owned on an online platform. We find that the number of reviews increases, but the average rating decreases after restaurants are identified as Black-owned. We investigate how various contextual factors, such as the number of hate crimes where the restaurant is located and restaurant popularity, as well as reviewer characteristics, such as reviewer race and gender, impact this relationship. We also examine mechanisms that could be contributing to our findings. Collectively, and in contrast to the positive findings in other studies, our results reveal a possible unintended consequence of identity disclosure for minority-owned businesses. Findings from our study offer important implications for society, business owners, and online platforms.