Abstract
In this study, I will be measuring how the presence of Minority Depository Institutions (MDIs), in a Metropolitan Statistical Area (MSA), can reduce the number of disparities in entrepreneurship and survival rates between Black and White business owners. The purpose of this paper is to expose how a limited number of MDIs contributes to entry barriers for entrepreneurship in the US. Minority Start-Up owners experience a plethora of challenges in operating a business and obtaining accessible credit appears to limit and discourage minority business owners from either starting and/or surviving. MDIs were created to develop to promote financial inclusion and its primary mission is to serve Low and Moderate-Income (LMI) communities by supplying accessible credit to minority households and firms. In this study, I will use crosswalk data, Kauffman Firm Survey, and the FDIC’s Branch Locator to determine whether the presence of an MDI impacts Entrepreneurship and Survival Rates for Black Nascent and experienced Entrepreneurs compared to their counterparts using two Linear Probability Models. In this study, I discovered that the presence of an MDI positively impacts the rate a Black Nascent Entrepreneur starts a business. On the other hand, MDIs does not play a significant role for start-ups surviving within a year of operation. Although the number of MDIs, within a community, does not reflects the success rate of any entrepreneur, this study reveals there are several entrepreneurial gaps that limits minority start-up owner’s ability to start and remain in this venture.
Advisor
Long, Melanie
Department
Business Economics
Recommended Citation
Hudson, Jaylin, "Unlocking the Potential of Entrepreneurship: The Impacts of Minority Depository Institutions on Disparities in Entrepreneurship Rates Between Black and White Entrepreneurs" (2024). Senior Independent Study Theses. Paper 11153.
https://openworks.wooster.edu/independentstudy/11153
Disciplines
Corporate Finance | Entrepreneurial and Small Business Operations | Finance | Race and Ethnicity
Keywords
Nascent Entrepreneurship, Survival Rates, Access to Capital, Minority Depository Institutions (MDIs), Discourage in Borrowing, Credit Discrimination, Minority Start-Ups, External Financing, Entrepreneurship Barriers, Expected Return, Racial Disparities, Race/Ethnicity, LMI Communities, Black and White Start-Ups, Capital Financing
Publication Date
2024
Degree Granted
Bachelor of Arts
Document Type
Senior Independent Study Thesis
© Copyright 2024 Jaylin Hudson