Factors impacting participation of Hispanic small businesses in government contracting in the USA

Abstract

PurposeThis study aims to examine the relationship among three main constructs of financial status, e‐commerce components, and Hispanic small businesses' (HSBs') perceptions regarding the contracting process of the United States Department of Agriculture (USDA) as they pertain to HSBs and their current capacity to gain access to government procurement.Design/methodology/approachThe paper employs descriptive statistics and association analysis conducted on survey data from a random sample of 206 HSBs.FindingsThe analysis indicates that the HSBs' financial status has no impact on HSBs pursuing contracts with the USDA; instead, it impacts HSBs' ability to secure contracts. E‐commerce components seem to have no impact on HSBs' ability to pursue and/or secure contracts. The perceptions of services provided by the USDA to HSBs were found to be different depending on whether an HSB has secured a USDA contract.Research limitations/implicationsFindings on HSBs in government contracting with the USDA might also be relevant to small businesses, regardless of ethnicity. This study was conducted for the USDA procurement process, but the process may vary due to the types of services contracted or the function of the agency/business itself. Non‐response biases were tested and found not significant.Originality/valueThis paper contributes to the literature in two complimentary ways. One contribution supports some of the earlier research on barriers for engagement of small business in government procurement. The second contribution offers specifics on Hispanic small businesses.