Persistent Stigma: Attributes, Positioning and Ties That (Do Not) Work in Business for the Historically Stigmatized

49 Pages Posted: 29 May 2019 Last revised: 7 Feb 2020

See all articles by Prateek Raj

Prateek Raj

Indian Institute of Management (IIMB), Bangalore; University of Chicago - George J. Stigler Center for the Study of the Economy and the State; University College London - School of Management

Pankaj Anand

Indian Institute of Management Bangalore

Date Written: December 16, 2019

Abstract

Business-owners from historically stigmatized communities (HSCs) can face stigma and become victims of discrimination in business. In this paper, we argue that discrimination is uniquely persistent for HSC business-owners, while business-owners from other disadvantaged but non-stigmatized communities can overcome them. We use a detailed pan-India dataset - that includes more than eight thousand business-owners of various castes - to observe an array of business-owner characteristics. We analyze the sources of business income disadvantage, and document that HSC business-owners (Scheduled Castes in India) face a large income gap even if they have a similar socioeconomic background as other business-owners. Business-owners from socioeconomically disadvantaged communities that are not associated with stigma do not face an income gap if they are themselves socioeconomically at par. We document a greater business income gap for business-owners from HSCs that face greater stigma, and this disadvantage is greater in more relationship-based industries. We find within-community social capital with higher-status acquaintances to be highly resourceful for non-HSC business-owners, but not for HSC business-owners. Hence, beyond-community social capital becomes critical for the success of HSC business-owners, and policymakers should create inclusive spaces where such beyond-community social capital could be built.

Keywords: Discrimination, Inequality, Intergroup relations, Social capital, India, Stigma, Entrepreneurship

Suggested Citation

Raj, Prateek and Anand, Pankaj, Persistent Stigma: Attributes, Positioning and Ties That (Do Not) Work in Business for the Historically Stigmatized (December 16, 2019). Available at SSRN: https://ssrn.com/abstract=3371792 or http://dx.doi.org/10.2139/ssrn.3371792

Prateek Raj (Contact Author)

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India
+918026993123 (Phone)

HOME PAGE: http://www.iimb.ac.in/profile/77

University of Chicago - George J. Stigler Center for the Study of the Economy and the State ( email )

Walker Hall
Chicago, IL 60637
United States

University College London - School of Management ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Pankaj Anand

Indian Institute of Management Bangalore ( email )

Bannerghatta Main Road, Bilekahalli
Bengaluru, Karnatak 560076
India

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