While small businesses represent a significant portion of the economy, there is mounting evidence that the playing field is not level for these firms in access to capital. Based on 10 years of matched-paired mystery shopping tests in banks to investigate bank lending practices and customer experience, the results demonstrate that in almost every instance, minorities were treated more poorly than their White counterparts. However, the authors acknowledge the controversy surrounding this issue, as some question the need for government action to push banks in this direction. Before offering evidence of the impact race can have on the treatment of small business owners who apply for loans, they present two frameworks which support the adoption of race-based criteria in evaluating bank performance, namely, Corporate Social Responsibility and Corporate Social Innovation. They then provide a summary of the results of mystery shopping studies they have conducted, concluding that banks are leaving profits on the table through their discriminatory practices.
Jerome D. Williams
Dr. Jerome D. Williams is a Distinguished Professor and the Prudential Chair in Business (Marketing Department), and Fellow of The Center for Urban Entrepreneurship & Economic Development (Management and Global Business Department) in the Rutgers Business School-Newark...
Sterling A. Bone
Utah State University
Dr. Sterling Bone is a Professor of Marketing at the Jon M. Huntsman School of Business at Utah State University. His research focuses on improving access to capital for racial/ethnic minority and women-owned businesses and optimizing frontline service and sales...
Glenn L. Christensen
Brigham Young University
Dr. Glenn L. Christensen is Garrett Research Fellow and Associate Professor of Marketing at the Marriott School of Business at Brigham Young University. He earned his PhD in marketing and consumer behavior from Penn State University and his MBA in marketing from the...
Utah State University
Alexandra Tebbs is an undergraduate research fellow at Center for Growth and Opportunity at Utah State University’s Jon M. Huntsman School of Business where she is completing her degree in finance and international business. While working as an intern for two summers at...
by Snejina Michailova, Christina Stringer, Alexia Husted
Modern slavery exists in developed and developing countries and in both labor-intensive and high-end sectors. While the business literature has paid attention...
by Jonathan Bundy, David L. Deephouse, Naomi A. Gardberg, William Newburry
Can we adequately assess corporate reputation? The “No” side argues that reputation is contextually dependent and lacks a consensus definition. The “Yes” side...