Stigma in Business: Attributes and Ties that (Do Not) Work

35 Pages Posted: 29 May 2019 Last revised: 17 Jul 2019

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: July 15, 2019

Abstract

Opportunities for socialization are critical for success in business. However, such opportunities are not equally available to all business owners. Discrimination in such opportunities can be a major source of disadvantage for business owners from historically marginalized communities, that face stigma. In this paper, we argue that challenges faced by these groups are distinct from those of other underrepresented and socioeconomically disadvantaged groups. We document that business owners from historically marginalized communities, specifically Dalits in India, face a large income gap even if they have a similar socioeconomic background to other business owners. Such a business income gap gets erased for other underrepresented and socially disadvantaged communities who do not face historical stigma. We find that the greater the stigma associated with a particular community, the greater their business income gap. We document that historically marginalized groups are more disadvantaged in industries that are more embedded, and that within-community social capital with higher-status acquaintances is highly resourceful for business owners from non-marginalized communities, but not for those from marginalized communities. Beyond-community social capital becomes critical for the success of business owners from marginalized communities, although they are able to tap them as much as other groups.

Keywords: discrimination, entrepreneurship, inequality, intergroup relations, social networks

Suggested Citation

Raj, Prateek and Anand, Pankaj, Stigma in Business: Attributes and Ties that (Do Not) Work (July 15, 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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