Factors underlying the likelihood of being in business for Indigenous and non-Indigenous Australians

Abstract

A significant difference exists between the rates of Indigenous and non-Indigenous business ownership in Australia. This paper attempts to understand the factors that may affect the likelihood of Indigenous Australians being in business compared to non-Indigenous Australians. We use a probit cross-sectional estimation on a close to 5 per cent sample of the Australian population from the 2016 Census to assess the factors that are associated with a higher probability of being in business for four groups: Indigenous men and women and non-Indigenous men and women. The results show that once accounting for other socioeconomic and demographic factors, identifying as Aboriginal and/or Torres Strait Islander in the Census explains a sizeable difference between the rates of business ownership. The results suggest a discriminatory barrier may affect the likelihood of being in business for many entrepreneurial Indigenous Australians. The paper also looks at the correlation between business ownership and education, home  ownership, access to networks, age, disability, marital status and geography.