Minority Entrepreneurs: More Likely to Try, But Less Likely to Succeed?

Abstract

The article describes a comparison of the success of black and white entrepreneurs. The author cites research by Philipp Kollinger of the German Institute for Economic Research (DIW Berlin) and Maria Minniti of Babson College. The reseachers found that black entrepreneurs are more likely to attempt a new business but less likely to succeed than their white counterparts—regardless of demographic or socio-economic characteristics or industry. Findings suggest that part of the gap is related to perceptual differences: Black entrepreneurs are more optimistic and so more willing to undertake a new business. Kollinger and Minniti posit that black under-representation among established entrepreneurs is related to external conditions, such as availability of financing.