Start‐up Motivations and Growth Intentions of Minority Nascent Entrepreneurs

Firm growth is widely considered to be a measure of success for entrepreneurial businesses. Data indicate that there are systematic differences between minority and nonminority‐owned firms with respect to growth. Black entrepreneurs are 50 percent more likely to engage in start‐up activities than white entrepreneurs, however, black‐owned firms are smaller and less profitable than their white‐owned counterparts. Following the effort–performance–outcome–logic of expectancy theory and using data from the Panel Study of Entrepreneurial Dynamics (PSED), our paper investigates the differences between black and white entrepreneurs' motivations to start and intentions to grow a new venture. Findings indicate that there are significant differences in motivations between black and white entrepreneurs both in starting and in their intentions to grow the new venture. Implications for future research are discussed.

[1]  Per Davidsson,et al.  Entrepreneurship — And after? A study of growth willingness in small firms , 1989 .

[2]  A. Licht,et al.  The Social Dimensions of Entrepreneurship , 2005 .

[3]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[4]  J. Nunnally.  Introduction to Psychological Measurement , 1970 .

[5]  P. Köllinger,et al.  Not for Lack of Trying: American Entrepreneurship in Black and White , 2006 .

[6]  Scott L. Cummings.  African American Entrepreneurship in the Suburbs , 1999 .

[7]  W. Gartner,et al.  THE CAREER REASONS OF MINORITY NASCENT ENTREPRENEURS. , 2002 .

[8]  J. S. Butler,et al.  The minority community as a natural business incubator , 1996 .

[9]  Magnus Henrekson,et al.  Determinants of the Prevalance of Start-ups and High-Growth Firms , 2002 .

[10]  E. Higgins,et al.  Social psychology: Handbook of basic principles. , 1996 .

[11]  N. Campbell,et al.  Influences of Puerto Rican, Black, and Anglo Parents' Career Behavior on Their Adolescent Children's Career Development , 1981 .

[12]  Jeffrey S. Hornsby,et al.  A Proposed Research Model of Entrepreneurial Motivation , 1994 .

[13]  Gavin Cassar,et al.  Money, money, money? A longitudinal investigation of entrepreneur career reasons, growth preferences and achieved growth , 2007 .

[14]  H. Howard,et al.  Special Issue: Corporate Entrepreneurship || A Paradigm of Entrepreneurship: Entrepreneurial Management , 1990 .

[15]  H. Stevenson,et al.  A Paradigm of Entrepreneurship: Entrepreneurial Management * , 1990 .

[16]  Carolyn Y. Woo,et al.  Initial Human and Financial Capital as Predictors of New Venture Performance , 1997 .

[17]  P. Rosa,et al.  Gender as a determinant of small business performance: Insights from a British study , 1996 .

[18]  C. Matthews,et al.  Future Expectations for the New Business , 2004 .

[19]  Nancy M. Carter,et al.  The career reasons of nascent entrepreneurs , 2003 .

[20]  James C. Anderson,et al.  STRUCTURAL EQUATION MODELING IN PRACTICE: A REVIEW AND RECOMMENDED TWO-STEP APPROACH , 1988 .

[21]  Howard E. Aldrich,et al.  Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States , 2006 .

[22]  D. Shepherd,et al.  Aspiring for, and Achieving Growth: The Moderating Role of Resources and Opportunities , 2003 .

[23]  Lynn E. Miller,et al.  Improving Predictions in Expectancy Theory Research: Effects of Personality, Expectancies, and Norms , 1988 .

[24]  S. Hogarth‐Scott,et al.  Opting for Growth: Gender Dimensions of Choosing Enterprise Development , 2009 .

[25]  Sue Birley,et al.  A taxonomy of business start-up reasons and their impact on firm growth and size , 1994 .

[26]  S. Shane.  A General Theory of Entrepreneurship: The Individual-Opportunity Nexus , 2003 .

[27]  Monder Ram,et al.  Forms of capital, mixed embeddedness and Somali enterprise , 2008 .

[28]  W. V. Eerde,et al.  Vroom's expectancy models and work-related criteria: A meta-analysis , 1996 .

[29]  M. K. D. Vries,et al.  THE ENTREPRENEURIAL PERSONALITY: A PERSON AT THE CROSSROADS , 1977 .

[30]  Janet S. Adams,et al.  Role Model Performance Effects on Development of Entrepreneurial Career Preference , 1989 .

[31]  Fiona Wilson,et al.  Our Entrepreneurial Future: Examining the Diverse Attitudes and Motivations of Teens Across Gender and Ethnic Identity , 2004 .

[32]  Howard E. Aldrich,et al.  Ethnicity and Entrepreneurship , 1990 .

[33]  James W. Carland,et al.  A proclivity for entrepreneurship: A comparison of entrepreneurs, small business owners, and corporate managers , 1999 .

[34]  William B. Gartner,et al.  Handbook of Entrepreneurial Dynamics: The Process of Business Creation , 2004 .

[35]  William J. Baumol,et al.  Entrepreneurship in Economic Theory , 1968 .

[36]  E. Gatewood.  The Expectancies in Public Sector Venture Assistance , 1993 .

[37]  P. Davidsson.  Continued Entrepreneurship: Ability, Need, and Opportunity as Determinants of Small Firm Growth , 1991 .

[38]  Terence R. Mitchell,et al.  Expectancy models of job satisfaction, occupational preference and effort: A theoretical, methodological, and empirical appraisal. , 1974 .

[39]  M. Lerner,et al.  Frontiers of Entrepreneurship Research , 2003 .

[40]  I. Ajzen.  Attitudes, Traits, and Actions: Dispositional Prediction of Behavior in Personality and Social Psychology , 1987 .

[41]  R. Kloosterman,et al.  Mixed Embeddedness: (In)formal Economic Activities and Immigrant Businesses in the Netherlands , 1999 .

[42]  Kelly G. Shaver,et al.  Entrepreneurial Expectancy, Task Effort, and Performance * , 2002 .

[43]  J. S. Butler,et al.  Ethnicity and Entrepreneurship in America: Toward an Explanation of Racial and Ethnic Group Variations in Self-Employment , 1991 .

[44]  Michael D. Reilly,et al.  Competing models of entrepreneurial intentions , 2000 .

[45]  I. Ajzen,et al.  Belief, Attitude, Intention, and Behavior: An Introduction to Theory and Research , 1977 .

[46]  Kelly G. Shaver,et al.  A longitudinal study of cognitive factors influencing start-up behaviors and success at venture creation , 1995 .

[47]  Dean A. Shepherd,et al.  Entrepreneurship as a Utility-Maximizing Response , 2000 .

[48]  Magnus Henrekson.  Determinants of the Prevalence of Start-ups , 2002 .

[49]  R. Fairlie.  The Absence of the African‐American Owned Business: An Analysis of the Dynamics of Self‐Employment , 1999, Journal of Labor Economics.

[50]  Oliver W. Hill,et al.  Three Studies of Factors Affecting the Attitudes of Blacks and Females toward the Pursuit of Science and Science-Related Careers. , 1990 .

[51]  R. MacCallum,et al.  THE APPLICATION OF EXPLORATORY FACTOR ANALYSIS IN APPLIED PSYCHOLOGY: A CRITICAL REVIEW AND ANALYSIS , 1986 .

[52]  A. Shapero,et al.  The Social Dimensions of Entrepreneurship , 1982 .

[53]  P. Davidsson,et al.  Arriving at the high growth firm , 2003 .

[54]  V. Vroom.  Work and motivation , 1964 .

[55]  C. Brush,et al.  Building Ventures through Civic Capitalism , 2007 .

[56]  Timothy Bates.  The Emergence of Entrepreneurship Policy: Minority Business Assistance Programs Are Not Designed to Produce Minority Business Development , 2003 .

[57]  Jeffrey S. Hornsby,et al.  An Examination of Owner's Goals in Sustaining Entrepreneurship , 1997 .

[58]  Steven H. Hanks,et al.  Market attractiveness, resource-based capabilities, venture strategies, and venture performance , 1994 .

[59]  Kelly G. Shaver,et al.  Person, Process, Choice: The Psychology of New Venture Creation , 1992 .

[60]  S. Coleman.  IS THERE A LIQUIDITY CRISIS FOR SMALL, BLACK-OWNED FIRMS? , 2005 .

[61]  I. Ajzen.  The theory of planned behavior , 1991 .

[62]  D. A. Kenny,et al.  The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. , 1986, Journal of personality and social psychology.

[63]  Nicholas A. Lash.  BLACK-OWNED BANKS: A SURVEY OF ISSUES , 2005 .