Journal of Developmental Entrepreneurship

Entrepreneurs have been traditionally epitomized as rugged individuals garnering creative forces of innovation and technology. Applying this traditional, limited, and narrow view of entrepreneurship to ethnic firm creation and growth is to ignore or discount core cultural values of the ethnic contexts in which these firms operate. It is no longer possible to depend solely on human capital theory and household characteristic descriptions to understand the complex and interdependent relationships between the ethnic-owning family, its firm, and the community context in which the firm operates. This paper addresses the complex dynamic of ethnic firms with three purposes: (a) to provide a cultural context for the three ethnic groups composing the National Minority Business Owner Study; (b) to extend the Sustainable Family Business Theory, a dynamic, behaviorally-based, multi-dimensional family firm theory, by clarifying how it accommodates ethnic firm complexities within their cultural context, and (c) to derive implications for research, education and consulting with worldwide applications.

Residential segregation has played a central role in theories of minority entrepreneurship. This study integrates two theories in the extant literature on minorities and urban areas (spatial assimilation theory and labor market disadvantage theory); and tests a hypothesis on the self-employment likelihood of black Americans. Descriptive statistics indicate a negative relationship between black-white segregation and increasing socioeconomic status (SES), although blacks remain considerably residentially segregated from whites of similar SES. The model results indicate that, after controlling for a number of factors, segregation of high SES blacks and whites in a metropolitan area is associated with higher likelihood of black self-employment.

This paper contributes to our understanding of minority entrepreneurs in the US by showing that ethnicity alone should not be used to describe or categorize small business owners. We examine a sample of 508 entrepreneurs from three minority groups (African, Mexican, and Korean Americans) and a white group using cluster analysis to explore a categorization pattern that best describes the differences among these entrepreneurs. Our findings suggest that minority entrepreneurs are in fact a very heterogeneous group on a multitude of dimensions such as motivations for entry, satisfaction with the business, nature of problems experienced, and demographics of the business such as its size and gross income. Based on our findings, we recommend that educational and support programs targeting minority entrepreneurs should consider other variables rather than focusing on ethnicity alone.

By exploring difficulty in managing work-family conflict for minority entrepreneurs, this study considers work-family issues for business persons who have received little attention in the literature, yet form new businesses at rates exceeding the national average. We employ a role theory perspective to examine two major research questions using a nationally representative sample of African-American, Mexican-American, Korean-American, and White business owners. Specifically, we ask: do minority business owners experience greater difficulty in managing conflicts between work and family roles when compared to White entrepreneurs? And does difficulty in managing work-family conflict negatively impact business performance? Empirical results show that Korean-American and Mexican-American entrepreneurs have greater role demands, and subsequently, higher levels of difficulty in managing work-family conflict than African-Americans and Whites. Furthermore, difficulty in managing work-family conflict negatively impacts business performance whether performance is measured through the perception of the business owner, or through more objective financial measures. We contribute to the literature on minority entrepreneurs as well as expand the work-family conflict literature by shifting the focus from employed individuals to entrepreneurs, and by emphasizing the effect of such conflict on performance rather than well-being.

This study utilizes the Korean-American and Mexican-American samples in the National Minority Business Survey to examine the debt structure of small businesses owned by individuals from these ethnic groups. Small business owners with higher household net worth were more likely to borrow from finance companies, friends, and credit card companies. When controlling for business, business owner and family characteristics, Mexican-American small business owners with high net worth were significantly more likely to borrow from commercial banks than Mexican-American small business owners with low net worth are. Korean-American small business owners with high net worth were significantly more likely to utilize family loans than Korean-American small business owners with low net worth are. Korean-American small businesses appeared to be more financially dependent on the financial strength of their community, while Mexican-American small businesses owners appeared to be more financially independent.

This exploratory study conducted in heavily indigenous communities was undertaken to investigate entrepreneurial perceptions of community (sense of place, image, and positioning) and social capital (reciprocity, shared vision, and density of networks) resources present in rural communities, and the sponsorship involvement of the entrepreneurs in community activities. The uniqueness of the study was its focus on indigenous communities with a higher than state average Native-American population. Previous work highlighting the collective nature and attitudes of Native Americans was not supported for the entrepreneurs in this study. Indigenous entrepreneurs were those who identified their ethnicity as Native American and majority entrepreneurs were those who identified their ethnicity as white. For indigenous entrepreneurs, there were no significant correlations among social capital resources or community resources and sponsorship. For majority entrepreneurs, all three social capital resources correlated significantly with sponsorship, and none of the community resources correlated significantly with sponsorship. The correlation between image and sponsorship was statistically significant for the total sample (n = 149).

Mean scores to each of the social capital and community resources were calculated. Positioning was the resource with the lowest mean score. The positioning statement differentiates one downtown from a competing downtown and is indicative of how the downtown wants to be perceived. The findings point to the need for economic development officials to strengthen community positioning through an improved understanding and acceptance of the community's position statement by business owners in the community.