University Study Shows How the Slave Trade Has Lingering Effects on African Businesses

A new study, by researchers at Washington University in St. Louis and the University of Utah, finds that the effects of the African slave trade persist today among businesses in Africa.

The study found that businesses in countries that were active in the slave trade are more often tightly controlled by individuals or families — often because they have limited access to equity funding and shared ownership. Meanwhile, businesses in African countries less affected by the slave trade have more diversified ownership structures.

The researchers’ model suggests that 67 percent of firms in countries with above-median slave exports would have sole proprietorship. In contrast, countries below the median for slave exports have 46 percent sole ownership. While closely held ownership isn’t necessarily bad, the research suggests that some African firms may miss 21st-century growth opportunities due to the inability to raise capital through shared ownership.

This study suggests that African nations historically affected by the slave trade tend to have weak institutions that are unable to enforce the existence of contracts. They also have weaker and more concentrated social networks and trust.

“The slave trade appears to predict ownership structure in ways that nothing else can explain,” said Lamar Pierce, professor of organization and strategy at Olin School and co-author of the new study. Although ownership concentration can be very useful, not having the option to diversify ownership is bad.”

The full study, “Historical Origins of Firm Ownership Structure: The Persistent Effects of the African Slave Trade,” will be published in the Academy of Management Journal. It is available here.

Related Articles

Leave a Reply

Get the JBHE Weekly Bulletin

Receive our weekly email newsletter delivered to your inbox

Latest News

Johns Hopkins University Launches New Major and Center for Critical Study of Racism, Immigration, and Colonialism

The new Chloe Center for the Critical Study of Racism, Immigration, and Colonialism will provide research opportunities and educational events for the Johns Hopkins University community. As part of the new program, the university has announced a new undergraduate major in critical diaspora studies.

Chicago Library Receives $2 Million to Digitize Collection of African American History and Literature

The Vivian G. Harsh Research Collection housed within the Chicago Public Library will soon be available online to the public thanks to a $2 million grant from the Mellon Foundation.

Online Articles That May Be of Interest to JBHE Readers

Each week, JBHE will provide links to online articles that may be of interest to our readers. Here are this week’s selections.

Recent Books of Interest to African American Scholars

The Journal of Blacks in Higher Education regularly publishes a list of new books that may be of interest to our readers. The books included are on a wide variety of subjects and present many different points of view.

Featured Jobs