Abstract

Research on minority entrepreneurs suggests that perceptions are shaped by past outcomes. Minority entrepreneurs fear credit denial because of past rejection of financing. Financing gaps in turn contribute to unfavorable financial ratios for these enterprises primarily owned by minorities. They then fear failure because of poor business performance. Such performance in turn impairs their financing relationships. With these linkages, such perceptions may exacerbate the outcomes.

To reconcile negative perceptions of minority entrepreneurs with their growth in numbers, this study proposes that important differences exist among minority entrepreneurs themselves. Prior research compares the experiences of minority entrepreneurs to those of nonminority entrepreneurs. This study compares cohorts of successful entrepreneurs and unsuccessful entrepreneurs between these groups to resolve whether the negative perceptions are warranted and to determine their relationship to financing and performance outcomes. This method also addresses whether universal factors affect the outcomes for comparable minority and nonminority entrepreneurs.

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