The growth performance of top African American businesses

Smith, Delmonize A.; Tang, Zhi

doi:10.1108/00251741311291364

Cited by 8 publications

(3 citation statements)

References 20 publications

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“…We have seen how flexibility, choice and notions about independence characterise the small firm. These factors are not merely the liability of smallness (Smith and Tang, 2012). On the contrary, they may ensure the survival of the small firm yet also provide good reasons not to grow.…”

Section: Literature Reviewmentioning

confidence: 99%

The condition of smallness: how what it means to be small deters firms from getting bigger

Anderson

Ullah

2014

Management Decision

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Purpose – The purpose of this paper is to examine and explain why most small firms remain small. A new conceptual framework – the condition of smallness – is proposed. Design/methodology/approach – A critical examination of the literature about the nature of being a small firm is first conducted. Employing an inductive analysis of responses from a survey of 2,521 small business owners about employment regulation, the nature and effects of smallness is examined. Findings – It was found that owners' choice making combines with perceptions about their resources to produce a condition of smallness. The condition of smallness is conceptualised as the circularity perceptions, attitudes and consequent practices that reflect lack of knowledge, time and capability. It is argued that this condition of smallness inhibits growth to create a wicked problem that explains why most small firms don't grow. Research limitations/implications – This work is largely conceptual, albeit the argument is grounded in, and illustrated by, empirical data. The findings may not be generalisable beyond this paper's data sets, but may be generalisable conceptually. Originality/value – The focus of much scholarly work has been on growth firms. Yet the typical small firm is excluded so that the issues of smallness are often overlooked. This paper, therefore contributes to understanding why small firms don't grow.

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Section: Literature Reviewmentioning

confidence: 99%

The condition of smallness: how what it means to be small deters firms from getting bigger

Anderson

Ullah

2014

Management Decision

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“…Although this has been true for business ownership in general, it is certainly true for the Black entrepreneur who has been uniquely impacted by deindustrialization and discrimination historically (Bates 1993, 1994; Boyd 2000; Butler 1991; Wilson 1996). In fact, even though the spatial concentration of poverty and racial residential segregation persists, Black-owned businesses have outpaced general business growth patterns nationally (see also Boyd 2009; Robb and Fairlie 2009; Smith and Tang 2013). To illustrate, Figure 1 displays the changes in Black-owned businesses, as well as changes in the number of Black firms with paid employees from 1992 to 2007.…”

Section: Review Of Literaturementioning

confidence: 99%

The African-American Entrepreneur–Crime Drop Relationship

Parker

2015

Urban Affairs Review

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Although much of the urban violence literature focuses on the link between urban disadvantage and crime rates, in this article we explore the relationship between African-American entrepreneurship and rates of juvenile violence, net of the effects associated with labor market shifts and the concentration of disadvantage within these areas. That is, Black-owned businesses have increased considerably over time but have largely been neglected in the criminological literature. After generating two distinct measures of Black entrepreneurship, we test to see if Black-owned businesses were significant to the documented decline in juvenile violence in larger U.S. cities from 1990 to 2000. We find an inverse relationship between entrepreneurship and juvenile arrests involving violence across multiple cities in 1990 and 2000. Furthermore, when estimating a pooled cross-sectional time-series design, the growing presence of African-American businesses is a significant contributor to the change (decline) in Black youth violence during the period of the 1990 crime drop, while the rate of paid employees in Black firms remained unrelated to Black youth violence. In changing economic times, we discuss the importance of exploring ways to capture the presence of African-Americans in the urban economy.

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“…Still other research has focused on industry-level factors to explain the performance of MBEs. For example, Smith and Tang (2013) found that complex and volatile industry environments have a greater negative impact on the performance of African American firms than on their White-owned counterparts. The authors attribute their findings to a competitive disadvantage possessed by most MBEs, as they attempt to acquire critical resources necessary for growth.…”

Section: Introductionmentioning

confidence: 99%

Managing diversity in minority business enterprises: the impact of employee homogeneity on financial performance

Blount¹,

Smith

2020

EDI

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PurposeThe purpose of this paper is to investigate the impact of employee homogeneity on the financial performance of minority business enterprises (MBEs). It is widely postulated that MBEs tend to hire minorities that resemble the ethnicity of the founder(s) and that this is beneficial by helping to decrease minority unemployment rates as well as providing new opportunities to minorities that they might not otherwise receive at White-owned firms.Design/methodology/approachThe study used hierarchical linear regression on archival data of 271 MBEs to determine if employee homogeneity will be a factor in understanding their financial performance. The authors also conducted exploratory interviews with a convenience sample of MBEs to gain insight into the concept of employee homophily.FindingsThe research uncovered that as homogeneity increases, MBE financial performance decreases, and this effect is more pronounced the longer the MBE is in business.Research limitations/implicationsThe data set is cross-sectional in nature and lack the perspective and clarity of time. The paper only contains a small set of exploratory interviews. The most significant implication from the study is that a lack of diversity decreases the long-term financial viability of MBEs which is to counter mainstream arguments that speak only to the positive aspects of MBEs Chiring their own.Originality/valueThe research builds on the scant literature on the impact of diversity within MBEs. It also provides guidance to MBEs by suggesting they be strategic in diversifying their employee base in order to improve performance.

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The growth performance of top African American businesses

Cited by 8 publications

References 20 publications

The condition of smallness: how what it means to be small deters firms from getting bigger

The condition of smallness: how what it means to be small deters firms from getting bigger

The African-American Entrepreneur–Crime Drop Relationship

Managing diversity in minority business enterprises: the impact of employee homogeneity on financial performance

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