Analysis of Young Neighborhood Firms Serving Urban Minority Clients

22 Pages Posted: 11 Jun 2008

See all articles by Timothy Bates

Timothy Bates

Wayne State University - College of Urban, Labor, & Metropolitan Affairs; University of Vermont - College of Arts and Sciences

Alicia Robb

University of Colorado at Boulder; Next Wave Impact; Federal Reserve Banks - Federal Reserve Bank of Atlanta

Date Written: May 2008

Abstract

This study empirically investigates Michael Porter's hypothesis that urban minority neighborhoods offer attractive opportunities to household-oriented businesses, such as retail firms (1995). Our analysis compares the traits and performance of firms serving predominantly minority clients to those selling their products largely to clients who are nonminority whites. Controlling statistically for applicable firm and owner characteristics, our findings indicate that the minority neighborhood niche does not offer young firms an attractive set of opportunities. Relative to opportunities in the corresponding nonminority household niche and the broader regional marketplace, the neighborhood minority household market is associated with reduced business viability.

Keywords: Entrepreneurship, Business Performance, Inner City Markets

Suggested Citation

Bates, Timothy and Robb, Alicia, Analysis of Young Neighborhood Firms Serving Urban Minority Clients (May 2008). US Census Bureau Center for Economic Studies Paper No. CES-WP-08-11. Available at SSRN: https://ssrn.com/abstract=1143382 or http://dx.doi.org/10.2139/ssrn.1143382

Timothy Bates (Contact Author)

Wayne State University - College of Urban, Labor, & Metropolitan Affairs ( email )

Detroit, MI 48202
United States

University of Vermont - College of Arts and Sciences ( email )

United States

Alicia Robb

University of Colorado at Boulder ( email )

Leeds Business School
Boulder, CO 80309
United States

Next Wave Impact ( email )

7455 Park Lane Road
Longmount, CO 80503
United States

Federal Reserve Banks - Federal Reserve Bank of Atlanta

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

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