Role of socialization in business: lessons from Dalit enterprises

Market inclusion of marginalized groups is a major challenge in mature and emerging markets. We argue that opportunities for socialization are critical for the success of business-owners from marginalized groups such as the Dalit community. Inequality in such opportunities is a major source of disadvantage that marginalized groups face. Using a national survey of households and businesses in India, and a collection of personal interviews of Dalit business-owners in Delhi NCR, we find that beyond-community social capital is critical for the success of Dalit businesses. We show that within-community social capital of non-Dalit businesses is more resourceful, and Dalit businesses are more disadvantaged in industries that are more embedded - where businesses have higher social capital. We discuss the ways in which Dalit businesses overcome the odds they face in doing business in socially segregated markets.