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

Statistical Disparities in Capital Markets
Unfortunately, the 2003 SSBF did not over-sample minority-owned firms, as in the first three
survey waves. According to survey staff, this was due to concerns that doing so would delay the
survey timeline and reduce the overall response rate. 296
In 1998, almost 8 percent of survey respondents were African American, compared to slightly
more than 3 percent in 2003. Hispanics were almost 7 percent in 1998 but less than 4 percent in
2003. Other minorities were 6.5 percent in 1998 but only 5.4 percent in 2003. 297 Although the
population weights were adjusted to accommodate these changes, even these weighted
percentages are significantly smaller for minorities in 2003 than in 1998. 298
Mach and Wolken (2006) reported using these data that 13.1 percent of firms were owned by
nonminority or Hispanic individuals; the share is statistically lower than in 1998 (14.6 percent).
The shares for African Americans and Asians/Pacific Islanders each held roughly constant at
4 percent; the share of American Indians and Alaska natives held at roughly 1 percent. However,
the share of Hispanics fell a statistically significant amount from 5.6 percent to 4.2 percent,
which is somewhat surprising given the evidence that Hispanics are a growing share of the U.S.
population—up from 12.5 percent in 2000 to 14.5 percent in 2005 (Table 4). The percentage of
firms owned by females also declined from 72.0 percent to 64.8 percent.
Despite these drawbacks, our analysis of the 2003 SSBF yields results that are strongly
consistent with those obtained from the 1993 and 1998 survey waves. The remainder of this
section presents our findings from this analysis. 299
1. Qualitative Evidence
Table 6.24 reports the results of asking business owners for the most important problem
currently facing their firm. Consistent with the 1993 and 1998 surveys, firms owned by minority
and women-owned firms were more likely to say that their most important problem was
“financing and interest rates.” Once again, the African American-nonminority difference was
most pronounced—only slightly more than 5 percent of nonminority male business owners
reported this as their major problem compared to almost 21 percent of African American
business owners.
296 See fn. 253, above.
297 The impact on women was not as pronounced. Females were 23.3 percent in 1998 and 20.9 percent in 2003. For
nonminority females, the figures are 17.8 percent in 1998 and 18.2 percent in 2003.
298 Mach and Wolken (2006, Table 2) report that weighted figures for Blacks were 4.1 percent in 1998 and 3.7
percent in 2003. Hispanics were 5.6 and 4.2 percent, respectively; Asians and Pacific Islanders were 4.4 and 4.2
percent, respectively; Native Americans were 0.8 and 1.3 percent, respectively; and women were 24.3 and 22.4
percent, respectively.
299 The data file provided by the Board of Governors includes five separate observations per firm. That is to say,
there are 4240*5=21,200 observations. These so-called multiple imputations are done via a randomized
regression model, and are included because where there are missing observations several alternative estimates
are provided. Where values are not missing the values for each of the five imputations are identical. We make
use of the data from the first imputation: the results presented here are essentially identical whichever imputation
is used. Overall, only 1.8 percent of observations in the data file were missing.
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