Black Americans Twice As Likely As White Americans To Start A Business

Newswise — Black Americans are twice as likely as white Americans to try to start a business, according to a study by Dr. Philipp Koellinger of the German Institute for Economic Research and Babson College and Economics and Entrepreneurship Professor Maria Minniti.

The full article, "Not For Lack Of Trying: American Entrepreneurship In Black And White," also found that black Americans tend to exhibit more optimistic perceptions of their business environment than other racial groups. However, black entrepreneurs are more likely than white entrepreneurs to fail in the early stages of the entrepreneurial process.

The findings are based on a sample obtained from the Global Entrepreneurship Monitor survey conducted in the United States during the summer of 2002. GEM is led by Babson College and London Business School.

According to U.S. Bureau of the Census 1993 figures, approximately 11.6% of white workers are self-employed but only 3.8% of black workers are self-employed. Minniti and Koellinger research suggests that such a lack of participation in business ownership among blacks is not due to a lack of entrepreneurial propensity.

"Just the opposite," said Prof. Minniti. "We find that black Americans tend to exhibit more optimistic perceptions of their business environment than other racial groups. Thus, our results suggest that the under-representation of black Americans among established entrepreneurs is not due to lack of trying but may instead be due to stronger barriers to entry and higher failure rates.

The German Institute for Economic Research is one of the leading research institutes in Germany. It is an independent, non-profit academic institution which is involved in basic research and policy advice. DIW Berlin was originally founded in 1925 as Institute for Business Cycle Research and was later renamed in German Institute for Economic Research.

Babson College in Wellesley, Mass., is recognized internationally as a leader in entrepreneurial management education. Babson grants BS degrees through its innovative undergraduate program, and grants MBA and custom MS and MBA degrees through the F.W. Olin Graduate School of Business at Babson College. Babson Executive Education offers executive development programs to experienced managers worldwide. For information, visit http://www.babson.edu