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Enhancing product market access: Minority entrepreneurship, status leveraging, and preferential procurement programs

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  • Lois M. Shelton

    (California State University)

  • Maria Minniti

    (Syracuse University
    Aalto University)

Abstract

Access to product markets is a key barrier faced by minority entrepreneurs. Preferential procurement programs, which include government set-asides and commercial supplier diversity initiatives, are intended to aid these entrepreneurs in overcoming this barrier. Although the first programs resulted in minimal improvements due to design flaws and poor oversight, some recent initiatives have been redesigned to address these inadequacies. Using a qualitative approach, we examine the impact of these programs on product market access and present a conceptual model of their effect on the opportunity identification, evaluation, and exploitation of Black and Hispanic entrepreneurs. Our analysis suggests that preferential procurement programs may expand product market access by improving the information available to entrepreneurs and by altering the incentives of key resource providers. As a result, these programs may actually enable some minority entrepreneurs to achieve rapid expansion (high-growth entrepreneurs) and others to overcome personal limitations and establish viable enterprises (lower growth entrepreneurs) by leveraging their minority status.

Suggested Citation

  • Lois M. Shelton & Maria Minniti, 2018. "Enhancing product market access: Minority entrepreneurship, status leveraging, and preferential procurement programs," Small Business Economics, Springer, vol. 50(3), pages 481-498, March.
    • Handle: RePEc:kap:sbusec:v:50:y:2018:i:3:d:10.1007_s11187-017-9881-7
    DOI: 10.1007/s11187-017-9881-7
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    3. Pan, Mengyang & Hill, James & Blount, Ian & Rungtusanatham, Manus, 2022. "Relationship building and minority business growth: Does participating in activities sponsored by institutional intermediaries help?," Journal of Business Research, Elsevier, vol. 142(C), pages 830-843.
    4. Alinaghian, Leila & Razmdoost, Kamran, 2021. "How do social enterprises manage business relationships? A review of the literature and directions for future research," Journal of Business Research, Elsevier, vol. 136(C), pages 488-498.
    5. Ian Blount & Mingxiang Li, 2021. "How Buyers' Attitudes Toward Supplier Diversity Affect Their Expenditures with Ethnic Minority Businesses," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(3), pages 3-24, July.
    6. Tkachenko, Andrey, 2022. "State-business relations and access to external financing," BOFIT Discussion Papers 10/2022, Bank of Finland Institute for Emerging Economies (BOFIT).
    7. Bernard Hoekman & Bedri Kamil Onur Taş, 2022. "Procurement policy and SME participation in public purchasing," Small Business Economics, Springer, vol. 58(1), pages 383-402, January.
    8. Swab, R. Gabrielle & Wolfe, Marcus, 2023. "Game on! Age, race, and performance in the board game industry," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    9. Lee, In Hyeock & Lévesque, Moren, 2023. "Do resource-constrained early-stage firms balance their internal resources across business activities? If so, should they?," Journal of Business Research, Elsevier, vol. 159(C).
    10. Marlene Orozco, 2020. "Reconceptualizing the Enclave: Measuring Success Among Latino‐Owned Businesses," Social Science Quarterly, Southwestern Social Science Association, vol. 101(4), pages 1374-1396, July.
    11. Marlene Orozco, 2022. "The salience of ethnic identity in entrepreneurship: an ethnic strategies of business action framework," Small Business Economics, Springer, vol. 59(1), pages 243-268, June.
    12. Schade, Philipp & Schuhmacher, Monika C., 2022. "Digital infrastructure and entrepreneurial action-formation: A multilevel study," Journal of Business Venturing, Elsevier, vol. 37(5).
    13. Kalyuzhnova, Yelena & Azhgaliyeva, Dina & Belitski, Maksim, 2022. "Public Policy Instruments for Procurement: An Empirical Analysis," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    14. repec:zbw:bofitp:2022_010 is not listed on IDEAS

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