The State of Minority- and Women- Owned ... - Cleveland.com

Market-Based Disparities in Business Formation and Business Owner Earnings
b. Specifications 2 and 3 - the Full Model Including CLEVMA-Specific
Interaction Terms 246
Several of the CLEVMA interaction terms included in Specification 2 were significant. The final
results are shown in Specification 3 for Tables 5.9 through 5.11.
To summarize for the economy-wide results (Table 5.9):
• For African Americans, business formation rates are 4.0 percentage points lower than
what would be expected in a race- and gender-neutral market area. 247
• For Hispanics, business formation rates are 1.2 percentage points lower than what would
be expected in a race- and gender-neutral market area.
• For Asians/Pacific Islanders, business formation rates are 1.0 percentage points higher
than what would be expected in a race- and gender-neutral market area.
• For Native Americans, business formation rates are 7.0 percentage points higher than
what would be expected in a race- and gender-neutral market area.
• For persons reporting two or more races, business formation rates are 0.8 percentage
points higher than what would be expected in a race- and gender-neutral market area.
• For nonminority women, business formation rates are 3.6 percentage points lower than
what would be expected in a race- and gender-neutral market area.
To summarize for the construction sector results (Table 5.10):
• For African Americans, business formation rates are 2.3 percentage points higher than
what would be expected in a race- and gender-neutral market area.
• For Hispanics, business formation rates are 17.1 percentage points higher than what
would be expected in a race- and gender-neutral market area.
• For Asians/Pacific Islanders, business formation rates are 5.9 percentage points lower
than what would be expected in a race- and gender-neutral market area.
• For Native Americans, business formation rates are 7.8 percentage points lower than
what would be expected in a race- and gender-neutral market area.
246 See above, section C.2.b., for a detailed description of Specifications 2 and 3.
247 Recall that the net business formation rate is equal to the value direct coefficient (on the African American
indicator variable in this case) plus the value of the statistically significant coefficient on the CLEVMA*African
American interaction term.
NERA Economic Consulting 168