Why Aren’t There More Minority Entrepreneurs?

We examine racial and gender differences in the intention to start a business and steps taken along the path to starting a business. Blacks and Hispanics are more likely to consider starting businesses; however, conditional on doing so, they are much less likely to launch the business. Black, unlike Hispanic or female respondents, are less likely to discuss ideas with friends or peers with relevant expertise. Racial differences in new business formation vanish when controlling for these (presumably low-cost) network channels. These results have important implications for policies aimed at boosting entrepreneurship in under-represented communities