Preferential Procurement Programs Do Not Necessarily Help Minority-Owned Business
January 1995
Working Paper Number:
CES-95-01
Abstract
Some minority business enterprises (MBEs) benefit from their participation in government preferential procurement programs and some do not. A subset of minority vendors identified in this study behaves in ways suggesting sensitivity to penalties for violating minority business certification and procurement program regulations. These firms flourish in the absence of fraud penalties. A different group of minority vendors selling to government benefits from an environment in which MBE certification is comprehensive, bonding and working capital assistance are available, and assistance is delivered by a staff dedicated to aiding potential and actual MBE vendors. The preferential procurement program can serve as either a valuable economic development tool for fostering minority business development, or it can promote MBE front companies that pass on their procurement contracts to nonminority firms. Some governments choose to operate the former type of program; others opt for the latter.
Document Tags and Keywords
Keywords
Keywords are automatically generated using KeyBERT, a powerful and innovative
keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant
keywords.
By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the
text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
enterprise,
sale,
company,
agency,
commerce,
black business,
minority,
sector,
revenue,
competitor,
discrimination,
wholesale,
disadvantaged
Tags
Tags are automatically generated using a pretrained language model from spaCy, which excels at
several tasks, including entity tagging.
The model is able to label words and phrases by part-of-speech,
including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
Characteristics of Business Owners,
Center for Economic Studies,
Supreme Court,
University of California Los Angeles
Similar Working Papers
Similarity between working papers are determined by an unsupervised neural
network model
know as Doc2Vec.
Doc2Vec is a model that represents entire documents as fixed-length vectors, allowing for the
capture of semantic meaning in a way that relates to the context of words within the document. The model learns to
associate a unique vector with each document while simultaneously learning word vectors, enabling tasks such as
document classification, clustering, and similarity detection by preserving the order and structure of words. The
document vectors are compared using cosine similarity/distance to determine the most similar working papers.
Papers identified with 🔥 are in the top 20% of similarity.
The 10 most similar working papers to the working paper 'Preferential Procurement Programs Do Not Necessarily Help Minority-Owned Business' are listed below in order of similarity.
-
Working PaperSmall Businesses Do Appear To Benefit From State/Local Government Economic Development Assistance🔥
February 1995
Working Paper Number:
CES-95-02
This study analyzes traits of small businesses that received state/local government aid in such forms as managerial, technical assistance, help in obtaining loans or bonding, and procurement assistance. Over 13 percent of small firms nationwide were found to be involved in selling goods/services to state/local government. Among firms owned by nonminorities, aid recipients tend to be the larger small businesses, but this pattern did not typify minority-owned firms. Among the nonminority businesses, furthermore, those aided by state/local government are more likely than nonassisted firms to remain in operation, even when various form and owner characteristics are controlled for statistically; this pattern did not typify minority-owned firms. State/local government aid flows disproportionately to women- owned businesses and to firm owners who lack managerial experience. No evidence was found indicating targeting of assistance to specific industry groups.View Full Paper PDF
-
Working PaperMICROENTERPRISE AS AN EXIT ROUTE FROM POVERTY:* RECOMMENDATIONS FOR PROGRAMS AND POLICY MAKERS🔥
November 1998
Working Paper Number:
CES-98-17
The objective of this study is to shed light on whether and how microenterprise programs can be used as an economic development strategy to enable low-income people to achieve self-sufficiency through self-employment. Our findings provide little support for the notion that hard work and a small loan are sufficient ingredients for business success. Viable small firms are usually headed by well-educated owners and/or those possessing specific skills that serve as a basis for successful business creation and operation. Potential entrepreneurs lacking assets, skills, and support networks are unlikely to support themselves through self-employment earnings alone. As a poverty alleviation strategy, microenterprise is not a panacea. Nevertheless, programs targeting the poor who do have skills, resources, and support networks can be useful vehicles for helping some to escape poverty.View Full Paper PDF
-
Working PaperAnalysis of Young Neighborhood Firms Serving Urban Minority Clients🔥
May 2008
Working Paper Number:
CES-08-11
This study empirically investigates Michael Porter's hypothesis that urban minority neighborhoods offer attractive opportunities to household-oriented businesses, such as retail firms (1995). Our analysis compares the traits and performance of firms serving predominantly minority clients to those selling their products largely to clients who are nonminority whites. Controlling statistically for applicable firm and owner characteristics, our findings indicate that the minority neighborhood niche does not offer young firms an attractive set of opportunities. Relative to opportunities in the corresponding nonminority household niche and the broader regional marketplace, the neighborhood minority household market is associated with reduced business viability.View Full Paper PDF
-
Working PaperFinancing Small Business Creation: The Case of Chinese and Korean Immigrant Entrepreneurs🔥
September 1996
Working Paper Number:
CES-96-09
Prevailing scholarly literature misrepresents the realities of how immigrant Korean and Chinese entrepreneurs finance entry into small business. Supportive peer and community subgroups are not major sources of startup capital; the majority of all loan funds are raised by borrowing from financial institutions. The major single funding source is equity capital, which derives almost entirely from family household wealth holdings. Controlling for firm and owner traits, comparison groups of nonminority and Asian American nonimmigrant self-employed borrowers are shown to have greater access to loan sources than Korean and Chinese immigrants. High equity capital investment offsets this disadvantage. Absent rotating credit associations, and other minor debt sources, the average Korean/Chinese startup possesses substantially more financial capital than its nonminority counterparts.View Full Paper PDF
-
Working PaperSelf-Employment Trends Among Mexican Americans🔥
August 1990
Working Paper Number:
CES-90-09
Minority businesses are commonly aggregated into groups of 1) black, 2) Hispanic, and 3) Asian-owned firms. These analytical groupings may, in fact, be useful if blacks, Hispanics and Asians exhibit intra-group similarities and intergroup differences in terms of business development patterns. The applicable similarities and differences do appear to typify the Asian and black groups of self-employed, but they do not typify Hispanic-owned small businesses. In other words, "Hispanic" does not appear to be a useful category for analysis. The Hispanic subset, Mexican American-owned firms, is judged to be suitable for analysis. Most minority-owned firms have traditionally been started with minimal financial capital inputs by owners who have not attended college. The resultant small scale firms have frequently oriented their operations toward serving a low income minority clientele. In this study, I investigate two closely interrelated broad hypotheses on minority business dynamics, utilizing a sample of Mexican American business establishments drawn from the Characteristics of Business Owners data base: Traditional firms - these firms tend to a) be small scale, b) have high failure rates, c) and generate few jobs because of their minimal owner inputs of financial and human capital. Emerging firms, in contrast, are most commonly started by better educated owners--many of whom have attended four or more years of college--and financial capital inputs are high relative to those observed in traditional lines of business. It is because of these larger financial and human capital inputs that emerging firms tend to be a) larger scale, b) have lower failure rates, and c) generate more jobs, relative to their traditional cohorts. Sociologists have used the term "protected market" to describe the culturally-based tastes of ethnic minorities that can only be served by co-ethnic businesses. Particularly in the early years of settlement, immigrants are assumed to patronize co-ethnic enterprises, and this pattern of patronage seems to typify Hispanic enclaves in areas such as Southern California. Whether or not the resultant protected market is an asset to Mexican American firms-- particularly those in traditional fields such as small-scale retailing--is investigated econometrically. The evidence indicates that the protected market provided by immigrants patronizing co-ethnic enterprises is an absolute hindrance to Mexican American business viability. The very low incomes of most recent immigrants constrain the attractiveness of this protected market. The state of the barrio business community reflects the economic circumstances of its clientele.View Full Paper PDF
-
Working PaperSurvival Patterns Among Newcomers to Franchising🔥
January 1997
Working Paper Number:
CES-97-01
This study analyzes survival patterns among franchisee firms and establishments that began operations in 1986 and 1987. Differing methodologies and data bases are utilized to demonstrate that 1) franchises have higher survival rates than independents, and 2) franchises have lower survival rates than independent business formations. Analyses of corporate establishment data generate high franchisee survival rates relative to independents, while analyses of young firm data generate the opposite pattern. In either case, the franchise trait is one of several determinants of survival prospects. The larger-scale, more established firms consistently stay in operation more frequently than smaller-scale, younger firms. Analysis of all corporate establishment restaurant units opened in 1986 or 1987 that use paid employees in 1987 helps to reconcile the seeming inconsistencies reported above. Most of the young franchisee units were not owned by young firms: rather, their parents were multi-establishment franchisees, and most of them were mature firms. Among the true newcomers, franchise survival rates are low; among the entrenched multi-establishment franchisees, survival rates were high.View Full Paper PDF
-
Working PaperSurvival Patterns Among Newcomers To Franchising
May 1997
Working Paper Number:
CES-97-05
This study analyzes survival patterns among franchisee firms adn establishments that began operations in 1986 and 1987. Differing methodologies and data bases are utilized to demonstrate that 1) franchises have higher survival rates than independents, and 2) franchises have lower survival rates than independent business formations. Analyses of corporate establishment data generate high franchisee survival rates relative to independents, while analyses of young firm data generate the opposite pattern. In either case, the franchise trait is one of several determinants of survival prospects. The larger-scale, more established firms consistently stay in operation more frequently than smaller-scale, younger firms. Analysis of all corporate establishment restaurant units opened in 1986 or 1987 that use paid employees in 1987 helps to reconcile the seeming inconsistencies reported above. Most of the young franchisee units were not owned by young firms: rather, their parents were multi-establishment franchisees, and most of them were mature firms. Among the true newcomers, franchise survival rates are low; among the entrenched multi-establishment franchisees, survival rates were high.View Full Paper PDF
-
Working PaperFirms Started As Franchises Have Lower Survival Rates Than Independent Small Business Startups
May 1994
Working Paper Number:
CES-94-03
Aspiring entrepreneurs choosing to become franchisees certainly expect to improve their chances of survival during the turbulent early years of business startup and operation. Alignment with a franchiser parent company offers the franchisee managerial assistance, access to financial capital, and access to markets via the right to utilize the parent company trademark. This study examines survival patterns among franchise and nonfranchise small firms started between 1984 and 1987: survival through late 1991 is tracked for all firms. Although the franchise operations are larger scale, better capitalized young firms, the independent business startups are found to be more profitable and their survival prospects are better than those of franchises.View Full Paper PDF
-
Working PaperCommercial Bank Lending Practices And The Development Of Black-Owned Construction Companies
December 1991
Working Paper Number:
CES-91-09
Although the construction industry has been a tremendous growth industry for black entrepreneurs in recent years, black-owned construction firms, on average, are less than half the size of those owned by nonminorities. Previous findings suggest that limited access to financial capital, particularly bank loans, has restricted the size of black-owned businesses. Examination of nationwide random samples of construction companies reveals that black firms are treated differently than nonminorities when they borrow from commercial banks: they get smaller loans than nonminorities who have otherwise identical traits. Undercapitalization, in turn, is shown to increase the likelihood of firm discontinuance. Alleviation of undercapitalization problems would help promote the development of black-owned businesses in the construction industry.View Full Paper PDF
-
Working PaperCrime's Impact on the Survival Prospects of Young Urban Small Businesses
October 2007
Working Paper Number:
CES-07-30
High prevailing levels of criminal activity have numerous impacts on the viability of urban small businesses and the various impacts are not uniformly negative. It is the negative impacts, however, that are most often noted. Either the perception or reality of rampant crime can scare away customers, potential employees, lending institutions, even casualty insurance underwriters. Yet, competitors may also be driven away. Operating in a high-crime area can be advantageous, on balance, for some firms. Our analysis of nearly 5,000 urban businesses started between 1986 and 1992 indicates that those most seriously impacted by crime exhibit no measureable disadvantage regarding firm size, capitalization, survival rates, or other traits, relative to firms whose owners report that crime has not impacted them negatively.View Full Paper PDF
