Entrepreneurial Performance by Women and Minorities: The Case of New Firms*
Vol. Volume 7, Number 4 December/2002
The primary objective of this paper is to compare how business survival varies between men- and women-owned business start-ups and between minority- and non-minority-owned business start-ups. By linking previously unavailable longitudinal microdata on business survival to microdata from a Census survey on women- and minority-owned businesses, comparisons are made regarding how business survival vary by race and gender. After controlling for business age, size, industry, location, legal form of organization, and organizational structure, it is found that Asian-owned businesses fared better than white-owned businesses. However, black- and Hispanic-owned businesses fared worse than white-owned businesses. Businesses owned by women fared worse than those owned by men; yet for black-owned businesses, those owned by women fared better than those owned by men. The results indicate that some of the differences in observed survival rates for new firms are driven by factors other than owner race and gender. However, even after controlling for many firm characteristics, significant differences in business survival remain. These results provide some preliminary evidence that some groups may face greater obstacles in starting successful business ventures.