Studies have been conducted to examine whether minority SMEs have the same access to loans compared to their white counterparts. Palia (2016) found out that minority borrowers have higher rejection rates compared to white borrowers. Minority borrowers have also been reported to have unequal access to capital markets and to encounter more institutional barriers (Reuben & Queen, 2015). Moreover, racial differences in startup capital have been found to negatively impact the performance of African-American firms (Robb, Fairlie, & Robinson, 2013). Despite these challenges, United States minority-owned business enterprises accounts for 29% of all firms (US Department of Commerce, Minority Business Development Agency, 2017). The current study is conducted to identify problematic funding strategies of MBE executives and how they affect MBEs accessibility to capital for innovation, investment, and growth. The following research questions and hypotheses will guide the study:
Qualitative research questions
How do executives of MBEs describe their funding strategies? And
How does funding strategies of MBE executives affect MBEs accessibility to capital for innovation, investment, and growth?
Quantitative research questions and hypothesis
Does MBE executives lack of funding strategies affect MBEs accessibility to capital for innovation, investment, and growth?
There is no significant difference between the effects of MBE executives with funding strategies and those without on MBEs accessibility to capital for innovation, investment and growth.
There is a significant difference between the effects of MBE executives with funding strategies and those without on MBEs accessibility to capital for innovation, investment, and growth.
Mixed research questions and hypothesis
To what extent do qualitative interviews with MBE executives serve to understand the relationship between MBE executives lack of funding strategies and MBEs accessibility to capital for innovation, investment, and growth, via integrative mixed method data analysis?
Palia, D. (2016). Differential access to capital from financial institutions by minority entrepreneurs. SSRN Electronic Journal, 13(4), 756-785. doi:10.2139/ssrn.2613087
Reuben, L. J., & Queen, P. E. (2015). Capital constraints and industry mix implications for African-American business success. The Review of Black Political Economy, 42(4), 355-378. doi:10.1007/s12114-015-9210-9
Robb, A., Fairlie, R. W., & Robinson, D. T. (2013). Patterns of financing: a comparison between white- and African-American young firms - fourth in a series of reports using data from the Kauffman Firm Survey. SSRN Electronic Journal. doi:10.2139/ssrn.1456451
US Department of Commerce, Minority Business Development Agency (2017). The minority business development agency: vital to making America great. Retrieved from https://www.mbda.gov/page/minority-business-development-agency-vital-making-america-great
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