OPPORTUNITY RECOGNITION DIFFERENCES BETWEEN BLACK AND WHITE NASCENT ENTREPRENEURS: A TEST OF BHAVE'S MODEL

Examining the opportunity recognition processes of black and white entrepreneurs may help improve the lagging rate of black entrepreneurship. Based on the framework provided by Bhave's (1994) model of new venture creation, and using data collected through the Panel Study of Entrepreneurial Dynamics, we found significant differences between the percentage of black and white nascent entrepreneurs who recognized externally-stimulated versus internally-stimulated opportunities and their projected firm revenues. As predicted, black nascent entrepreneurs were more likely to pursue externally-stimulated opportunities with significantly lower expected revenues than their white counterparts. Academic and practical implications are discussed and future research directions are offered.