Article

Community Matters: Successful Entrepreneurship in Remote Rural US Locations

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Abstract

Entrepreneurs in remote rural towns face unique challenges. These towns have fewer people, with less income, making fewer purchases. Businesses also have problems associated with long distances and isolation. However, these general circumstances cannot explain the variation in success among rural entrepreneurs. Due to the tendency in previous studies to aggregate data on rural businesses, the situation of entrepreneurs in remote rural US communities is understudied. The purpose of this study is to examine the correlates of successful entrepreneurs in these remote areas. The findings indicate that entrepreneurs who start businesses to provide income and flexibility for their family have more perceived success than those motivated by a desire for great wealth and the wish to challenge themselves. Entrepreneurs in high bridging social capital towns were also more successful. Community bridging social capital may enhance entrepreneurs' success by helping to retain and attract skilled labour, reducing costs, providing access to capital and engendering resident customer loyalty.

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... Besides the overall impact of economic climate, the rural and urban enterprises face their own distinctive set of challenges arising from their location, population and enterprise density, and regional development characteristics. The typical problems of rural enterprises include their distance from markets and suppliers Besser T.L., Miller N.J., 2013), small and specialised economies , and lack of economies of scale and agglomeration effect (Besser T.L., Miller N.J., 2013) etc. Due to both differences in industry composition and productivity, rural industries often lag behind their urban counterparts (Rizov M., Walsh P.P., 2011). ...
... Besides the overall impact of economic climate, the rural and urban enterprises face their own distinctive set of challenges arising from their location, population and enterprise density, and regional development characteristics. The typical problems of rural enterprises include their distance from markets and suppliers Besser T.L., Miller N.J., 2013), small and specialised economies , and lack of economies of scale and agglomeration effect (Besser T.L., Miller N.J., 2013) etc. Due to both differences in industry composition and productivity, rural industries often lag behind their urban counterparts (Rizov M., Walsh P.P., 2011). ...
... The drop in the sales revenue per enterprise was slower and recovered more quickly in 2010. Rural enterprises typically face the challenge of longer distances from markets, customers Besser T.L., Miller N.J., 2013). In Estonian case, the characteristic of rural enterprises was also the considerably lower average sales revenue, and the gap between the urban and rural enterprises continued to increase in the period studied. ...
Thesis
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... This is also related to the distinction between 'entrepreneurship in the rural' and RE [20]. • SC-EC4: Social capital related to cooperative or network work (networking) has a relevant impact on the risk of new entrepreneurial business initiatives [34,76,95,112]. • SC-EC5: The bonding SC related to networking has a relevant impact on access to local markets [112] and, consequently, on local embeddedness. • SC-EC6: The bridging SC related to networking has a relevant impact on access to extra-local markets [84,113], depends on immigration [83,98], and combined with local embeddedness can foster the success of entrepreneurial activities [43,84,98]. ...
... • SC-EC4: Social capital related to cooperative or network work (networking) has a relevant impact on the risk of new entrepreneurial business initiatives [34,76,95,112]. • SC-EC5: The bonding SC related to networking has a relevant impact on access to local markets [112] and, consequently, on local embeddedness. • SC-EC6: The bridging SC related to networking has a relevant impact on access to extra-local markets [84,113], depends on immigration [83,98], and combined with local embeddedness can foster the success of entrepreneurial activities [43,84,98]. ...
... • SC-HC1: Bonding, bridging and linking SC ties, particularly when they converge in a community or mutualization initiative [114], contribute to reducing the perception of risk and underpinning the entrepreneurial orientation, connecting with HC-EC4. • SC-HC2: Bonding, bridging and linking SC ties, derived from the combination of SC elements (trust, social norms, networks and place attachment) condition the motivation to start entrepreneurial projects [112,115,116]. Regarding CRE, the distinction between place-based communities (related more to bonding capital) or communities of interests (related more to bridging capital) is a clear example of this. ...
Article
Full-text available
Sustainable rural development (SRD) is an essential component of sustainable development on a global scale. Community Renewable Energy (CRE) has been advocated as a step forward in the progress towards SRD. While Northern European countries are experiencing a high development of CRE, Southern European countries lag behind. Considering entrepreneurship and renewable energy technologies (RET) as two fundamental components of CRE, through a systematic literature review this study identifies the antecedents or conditioning factors of entrepreneurship and RET exploitation in rural areas of developed countries, understanding that these same antecedents condition the development of CRE in these countries. The identified factors are organized around five capital spheres: economic, human, social, physical and natural. Given that these five spheres are not watertight compartments, but rather that their limits are diffuse and there are multiple interactions between them, we try to highlight their interrelationships through System Thinking based on the design of causal loop diagrams. The results can help policy makers and CRE projects’ promoters in the design of effective policies and strategies to foster the development of CRE in rural areas of developed countries.
... Besides the overall impact of economic climate, the rural and urban enterprises face their own distinctive set of challenges arising from their location, population and enterprise density, and regional development characteristics. The typical problems of rural enterprises include their distance from markets and suppliers Besser T.L., Miller N.J., 2013), small and specialised economies , and lack of economies of scale and agglomeration effect (Besser T.L., Miller N.J., 2013) etc. Due to both differences in industry composition and productivity, rural industries often lag behind their urban counterparts (Rizov M., Walsh P.P., 2011). ...
... Besides the overall impact of economic climate, the rural and urban enterprises face their own distinctive set of challenges arising from their location, population and enterprise density, and regional development characteristics. The typical problems of rural enterprises include their distance from markets and suppliers Besser T.L., Miller N.J., 2013), small and specialised economies , and lack of economies of scale and agglomeration effect (Besser T.L., Miller N.J., 2013) etc. Due to both differences in industry composition and productivity, rural industries often lag behind their urban counterparts (Rizov M., Walsh P.P., 2011). ...
... The drop in the sales revenue per enterprise was slower and recovered more quickly in 2010. Rural enterprises typically face the challenge of longer distances from markets, customers Besser T.L., Miller N.J., 2013). In Estonian case, the characteristic of rural enterprises was also the considerably lower average sales revenue, and the gap between the urban and rural enterprises continued to increase in the period studied. ...
... In the local context, understanding the effects of community involvement and attachment can lead to significant strategic advantages for small retailers. Prior studies have established that a firm's support for and commitment to the local community is positively linked to its performance (Besser 1999;Besser and Miller 2013) and retail patronage (Landry, Arnold, and Stark 2005;Kim and Stoel 2010). In addition, Handelman and Arnold (1999) found that marketing actions with a social dimension had a positive effect on consumers' support (i.e. ...
... Previous research has focused on analyzing the link between community embeddedness and patronage from a retailer's perspective (Landry, Arnold, and Stark 2005;Noble, Griffith, and Adjei 2006;Miller and Besser 2013), thus increasing our knowledge of how local retailer's actions for supporting and reviving local communities can lead to increased patronage among local customers. However, fewer studies have examined the role of consumers' community-based values (such as engagement with local community actions, preference for supporting local services, and social interaction with other consumers and store personnel) in determining local store patronage. ...
... Kim and Stoel (2010) proposed that, in a community where consumers perceive a high level of social capital, they place more value on the institutional actions of local retailers and will support them. Similarly, Besser and Miller (2013) found that entrepreneurs in high bridging social capital towns were more successful, and community bridging social capital may enhance their success by helping to retain and attract skilled labor, reduce costs, provide access to capital, and engender customer loyalty in residents. ...
Article
This paper examines the drivers of local grocery retail patronage. Drawing on institutional and social network theory literature, we develop a framework to investigate how consumers’ personal values and engagement with local communities affect their satisfaction and local store patronage. We test our model with survey data on 1504 Finnish consumers. Our results show that the relationship between customer local engagement and local retail patronage is indirect rather than direct, and it is mediated by the vitality of local services, social interaction, and consumer satisfaction.
... Because the primary interest of the research project is to explain the impact of the local values of consumers (defined as involvement in local activities) on the local preference of a local retailer, it focuses on three key constructs, which appear 275 in the literature and which demonstrate a positive relationship to local activities. Specifically, (1) interest in local events (Besser and Miller 2013a;Yildiz, Heitz-Spahn, and Belaud 2017), (2) active participation in local activities (Briggs et al. 2016;Yildiz, Heitz-Spahn, and Belaud 2017), and (3) preference of a local seller as the choice of primary shopping venue (Juga and Juntunen 2018;Sina and Kim 2019;280 Skippari, Nyrhinen, and Karjaluoto 2017). In general, it is true that consumers only rarely shop in just one store or format. ...
... Preference for a retailer using local elements in its stores impact on the species examined topic Miller 2013a, 2013b;Miller, Kean, and Littrell 1999) as well as the influence on the preference of the retailer (Pandey, Khare, and Bhardwaj 2015;Skippari, Nyrhinen, and Karjaluoto 2017;Yildiz, Heitz-Spahn, and Belaud 2017). These relationships not only contribute towards the preference of retailers for local 450 symbols and cultural traditions, but this also strengthens the community as a whole, where aspects such as reciprocity (Besser and Miller 2013a), social integration (Marjanen, Kohijoki, and Saastamoinen 2016) or social capital (Stoel and Kim 2010) all play crucial roles. ...
... The presented research contributes to the existing literature, which studies this specific topic. Compared to the study by (Pioch et al. 2009), which defines the most important factors for selection as price or performance, for example, the presented material 515 supports the assumption that social background, culture and location may have a crucial impact on human behaviour (Besser and Miller 2013a;Blažek 2009 Q14 ), even in Central Europe. Specific results show that interest in local events predetermines the preference of local and cultural aspects and the preference of retailers who endeavour to integrate themselves into the specific community and utilise elements related to the 520 specific locality within terms of their stores. ...
Article
In today’s world marketing is an important tool and local preferences based on the social environment can contribute substantially to the media mix. This study is about the issue of the preference of customers of stores, which use local elements as part of their marketing strategy over those who communicate globally. This paper describes the preference of Czech consumers for stores that use local elements as part of their marketing strategy over those who communicate globally. The model, which examines how interest in local activities and specific involvement in local communities’ influence consumer preferences, is created by the theory of justified action and the concept of the creation of social networks. The model is tested using data from a representative sample of Czech consumers (CAWI collection) using the analysis of the chi-square test and Spearman’s rank-order coefficient. The results show that both interest and specific involvement have a strong connection and relationship with local values. No similar study has previously been executed for the Czechia and this may be an important reason for feasible use in the retail branch. Due to similar development, this research can be generalized for other Central European countries.
... Many rural areas around the world are suffering from a downward spiral of population and businesses (Besser and Miller 2013;Korsching and Allen 2004). To address this, rural communities should improve the infrastructure to allow a stronger business base (Besser and Miller 2013), but most often the decisions regarding infrastructure are made at a high level and local residents and business owners are not involved in them (Peredo and Chrisman 2006). ...
... Many rural areas around the world are suffering from a downward spiral of population and businesses (Besser and Miller 2013;Korsching and Allen 2004). To address this, rural communities should improve the infrastructure to allow a stronger business base (Besser and Miller 2013), but most often the decisions regarding infrastructure are made at a high level and local residents and business owners are not involved in them (Peredo and Chrisman 2006). Community-based entrepreneurs can help solve some of these problems, according to Pierre et al. (2014), and one way to do this is through networks. ...
... Community-based entrepreneurs can help solve some of these problems, according to Pierre et al. (2014), and one way to do this is through networks. These networks can help enhance the efficiency of the society (Pierre et al. 2014), but according to Besser and Miller (2013), these networks will not help rural entrepreneurs to succeed; they will only serve the community at large. ...
Thesis
Full-text available
Entrepreneurs are portrayed as salient drivers of regional development and for a number of years nascent entrepreneurs have been studied in a large number of countries as part of the Global Entrepreneurship Monitor project and the Panel Study of Entrepreneurial Dynamics. Scholars have devoted much effort to investigating factors that determine how individuals engage in entrepreneurial activities, with most of the discussion limited to business start-ups. However, since this type of project does not follow identical nascent entrepreneurs over time, limited knowledge exists about their development and whether they stay in this nascent phase for a long time. In practice, it is common for entrepreneurs to run a business and at the same time work in wage work, so-called combining entrepreneurs. In Sweden, almost half of all business owners combine wage work with a business. However, not all combining entrepreneurs will eventually decide to leave the wage work and invest fully in the business. Consequently, much research has focused on the first step of entering entrepreneurship full time, but less has focused on the second step, the transition from the combining phase to full-time self-employment. The aim of this thesis is therefore to contribute to the theory of entrepreneurship by gaining a deeper understanding of combining entrepreneurs and their motives and intentions. The results indicate three types of combining entrepreneurs: nascent – with the intention to leave the combining phase for a transition into full-time self-employment, lifestyle – with the intention to stay in the combining phase, and occasional – with the intention to leave the combining phase for full-time wage work and close down the business. Transitioning fully to self-employment increases with the individual’s age. Also, a positive interactive effect exists with involvement in entrepreneurial networks. The results also indicate that the ability to work with something one is passionate about is the top motive for combining wage work with a side-business. Passion is also more likely to be the main motive behind the combining form among individuals who are older at business start-up, but passion is less likely to be the main motive behind the combining form among individuals who spend more time on the business. The longer the individual has had the side-business, the less likely passion is the main motive behind the combining form, and passion is less likely to be the main motive among those who are part of an entrepreneurial team.
... Johnson (1990) reviews the relevant literature and reports a fairly consistent relationship between achievement motivation and entrepreneurship but stresses the multi-dimensional character of entrepreneurship and the need to build theoretical models that account for the role and interplay amongst the various dimensions that are conducive to this phenomenon. Indeed, the study of entrepreneurship becomes even more complex when other interrelated parameters are brought into the analysis such as the stage of the entrepreneurial process (Estay et al., 2013;Segal et al., 2005), and the role of place (Besser & Miller, 2013;Figueroa-Armijos et al., 2012;Korsgaard et al., 2015). In their study of entrepreneurial motivation, Estay et al. (2013) identify different pathways as associated with different logics of action (e.g. ...
... Lower incomes and part-time employment are linked with necessity entrepreneurship in all rural and mixed-rural counties, while education is linked with opportunity driven entrepreneurship (Figueroa-Armijos et al., 2012). Besser and Miller (2013) study entrepreneurial initiatives in remote rural towns and conclude that these are more likely to succeed in providing a flexible source of income, thus sustaining the survival of the family business in contrast to initiatives motivated by a desire for great wealth and the need to experience a challenge. As they argue, community bridging social capital assists in the achievement of such goals by helping rural businesses in many ways (e.g. ...
... As they argue, community bridging social capital assists in the achievement of such goals by helping rural businesses in many ways (e.g. retain and attract skilled labour, reduce costs, access to capital, resident customer loyalty) (Besser & Miller, 2013). ...
Article
Full-text available
The recent financial crisis in Greece seems to have structured a trend towards rural renaissance. This trend might be considered a chance for rural empowerment to emerge as a ‘residual’ phenomenon drawn from a return to the periphery propensity. With a view to provide insights on such possible rural empowerment, we analyse individuals’ intentions towards entrepreneurship in rural areas. At the empirical level, we assess rural entrepreneurial potential and then we test for the factors that are conducive to it under an adopted operationalization of the n-tuple helixes approach to regional development. We employ data from two sources (micro level data from the Eurobarometer survey and contextual data from the Regional Accounts of the Hellenic Statistical Authority). Bootstrap logistic regression techniques provide robust empirical evidence of the importance of various sets of parameters including actor characteristics and actions, local community ties, civil services quality, the political environment, and the regional socio-economic structure. The predominant role of pecuniary concerns manifests the strong impact that the economic environment exerts on individuals’ views towards entrepreneurship. On the other hand, individuals seem to view crisis as a chance for the private sector to develop under less protectionism and trustworthy civil services.
... On the other hand, the second attracts people to self-employment because of the desire for autonomy, satisfying a market opportunity or developing a livelihood that balances work and family life. It has been found that push motivation awakens highly imitative reactionary ventures that are less profitable and durable (Besser and Miller, 2013), whereas, pull motivation is located as close to the Schumpeterian principles of creative destruction and sustainability of companies (Goetz et al., 2010). ...
... However, not all relationships are beneficial to the company; those that favour the business process are those that allow the entrepreneur to become part of the social structure and exchange resources, contacts and credibility with it. The presence of these effective social links with the community has also been effective in explaining the variations of success among entrepreneurs from remote areas in the USA (Besser and Miller, 2013). Integration to non-local networks is equally valuable, evidence about this was generated in Denmark, where local social integration complemented with links to non-local networks, allows rural entrepreneurs to establish strategic bridges that allow access to the best of two worlds: the local and the foreign (Korsgaard et al., 2015b). ...
The study of how companies arise in rural areas has gained a place in the agenda of researchers, academics and public officials. This is a documentary review in which the rural entrepreneurship process is conceived as an interaction of four elements: the process, the entrepreneur, the context and the community benefits. An important amount of evidence has been generated on the relationship between these components, however, a series of pending tasks are identified, including the need to specify the factors that favour the process in each of its stages, in terms of the characteristics of the entrepreneur and the context.
... Herslund (2012) critically observes counter urbanisation and how it adds to extended network and development of a larger regional area. Another study by Besser and Miller (2013) identifies the correlates of successful entrepreneurs in rural America and finds entrepreneurs who start to provide flexibility to their families are more successful than those who want to challenge themselves. Renski (2008) compares difference in firm survival and growth in rural, semi-urban and urban areas and finds while urban firms have a higher failure rate, employment rates are faster there whereas rural areas provide low growth rates due to low-tech manufacturing practices. ...
... Muhammad et al. (2017) find out that religious, socioeconomic and structural forces are significant causes that suppress social capital which in turn manifests in low levels of entrepreneurship in rural areas of Pakistan. Besser and Miller (2013) discuss the importance of social capital in enhancing rural entrepreneurship with regards to family business. Livonen et al. (Iivonen et al. 2011) in their phenomenographic study understand the dynamics at play between entrepreneurial behaviour and social capital. ...
Article
Rural entrepreneurship has manifested into a diverse and progressive feld of research in the last two decades. It has seen research amalgamating from diferent felds and faculties. Rural entrepreneurship however is scattered and lacks categorization. Therefore, literature review on rural entrepreneurship to understand what has been done and what can be done seems imperative. The main aim of this paper is to ofer the readers a clear picture of diferent categories in rural entrepreneurship research. This aim is achieved by performing a Bibliometric citation analysis and thereafter a thematic analysis to identify major areas where rural entrepreneurship research has been concentrated in the last 20 years. The study is based on 158 papers on rural entrepreneurship published in the last two decades. Despite a vast pool of publications, four major themes are identified; Spatial dimension, Sustainability, Income Generation and Barriers in rural entrepreneurship. From these themes 16 sub-themes have emerged during the review. Many gaps are identified in each category and avenues for further advancement of rural entrepreneurship is discussed.
... Herslund (2012) critically observes counter urbanisation and how it adds to extended network and development of a larger regional area. Another study by Besser and Miller (2013) identifies the correlates of successful entrepreneurs in rural America and finds entrepreneurs who start to provide flexibility to their families are more successful than those who want to challenge themselves. Renski (2008) compares difference in firm survival and growth in rural, semi-urban and urban areas and finds while urban firms have a higher failure rate, employment rates are faster there whereas rural areas provide low growth rates due to low-tech manufacturing practices. ...
... Muhammad et al. (2017) find out that religious, socioeconomic and structural forces are significant causes that suppress social capital which in turn manifests in low levels of entrepreneurship in rural areas of Pakistan. Besser and Miller (2013) discuss the importance of social capital in enhancing rural entrepreneurship with regards to family business. Livonen et al. (Iivonen et al. 2011) in their phenomenographic study understand the dynamics at play between entrepreneurial behaviour and social capital. ...
Conference Paper
This study tries to explore the different environments in which a child goes through in his formative years and whether these environments play a role in affecting his intention to study entrepreneurship as a career choice. Bronfenbrenner social ecological theory has been used as a backdrop to capture these environments. The four variables chosen are family support, school environment, self-efficacy and global awareness. Findings reveal that self-efficacy has the strongest influence on intentions followed by his school environment. Global awareness returns a negative impact on a child's entrepreneurship education intention in India. The study has implications in curriculum design and theory development. The study also provides schools with a framework to understand how to orient their students towards entrepreneurship.
... On the other hand, the second attracts people to self-employment because of the desire for autonomy, satisfying a market opportunity or developing a livelihood that balances work and family life. It has been found that push motivation awakens highly imitative reactionary ventures that are less profitable and durable (Besser and Miller, 2013), whereas, pull motivation is located as close to the Schumpeterian principles of creative destruction and sustainability of companies (Goetz et al., 2010). ...
... However, not all relationships are beneficial to the company; those that favour the business process are those that allow the entrepreneur to become part of the social structure and exchange resources, contacts and credibility with it. The presence of these effective social links with the community has also been effective in explaining the variations of success among entrepreneurs from remote areas in the USA (Besser and Miller, 2013). Integration to non-local networks is equally valuable, evidence about this was generated in Denmark, where local social integration complemented with links to non-local networks, allows rural entrepreneurs to establish strategic bridges that allow access to the best of two worlds: the local and the foreign (Korsgaard et al., 2015b). ...
Article
The study of how companies arise in rural areas has gained a place in the agenda of researchers, academics and public officials. This is a documentary review in which the rural entrepreneurship process is conceived as an interaction of four elements: the process, the entrepreneur, the context and the community benefits. An important amount of evidence has been generated on the relationship between these components, however, a series of pending tasks are identified, including the need to specify the factors that favor the process in each of its stages, in terms of the characteristics of the entrepreneur and the context. Key-words: rural enterprise, rural development, rural entrepreneur, community benefits and entrepreneurship promotion policy.
... The literature on rural entrepreneurship is replete with discussions of the challenges that entrepreneurs face to successfully starting and growing their businesses in rural communities. Some of these trials stem from the spatial isolation of rural places in the United States, which have been found to be even more isolated than those in Europe (Besser & Miller, 2013). This remoteness tends to make the resources necessary for successful entrepreneurship-physical, human, immaterial, financial, and social-less available locally and more difficult to obtain from external sources (Muller & Korsgaard, 2017). ...
... It has been widely observed that rural areas suffer from low population density and increasing population aging and outmigration (Besser & Miller, 2013;Frazier et al., 2013;Lamb & Sherman, 2010;Leung & Murray, 2009;Shields, 2005). In addition, household incomes tend to be lower than in urban areas (Shields, 2005;Mickiewicz et al., 2016;Yu & Artz, 2019). ...
Chapter
The lack of economic opportunity in rural areas of Central America has triggered a cascade of impacts resulting from environmental degradation, particularly in places where local communities utilize slash-and-burn agriculture—cutting and burning vegetation each growing season—as their main cropping system. This chapter seeks to demonstrate alternative approaches to slash-and-burn farming through a case study of Sustainable Harvest International (SHI). SHI tackles deforestation and economic constraints by fostering the development of an innovation ecosystem that promotes and improves regenerative agriculture, agroforestry techniques, and entrepreneurial endeavors. This case study focused on 29 participant families residing in four rural communities in the mountainous region of Yoro, northern Honduras. The findings indicate that families incorporated a minimum of four new regenerative agriculture techniques, doubled their environmental conservation initiatives, and accessed credit on a regular basis. Despite lack of access to capital, regenerative agriculture techniques offered participants a means by which they could support themselves and their community through innovation. As such, this chapter explores how participants, through their participation in SHI’s regenerative agriculture focused program, developed a culture of learning and knowledge sharing roles of these innovative practices. Findings also suggest that SHI participants were able to build the structures and institutions necessary to sustain their innovations over time, thus reinforcing their cultural and other practices by using locally available resources.
... The literature on rural entrepreneurship is replete with discussions of the challenges that entrepreneurs face to successfully starting and growing their businesses in rural communities. Some of these trials stem from the spatial isolation of rural places in the United States, which have been found to be even more isolated than those in Europe (Besser & Miller, 2013). This remoteness tends to make the resources necessary for successful entrepreneurship-physical, human, immaterial, financial, and social-less available locally and more difficult to obtain from external sources (Muller & Korsgaard, 2017). ...
... It has been widely observed that rural areas suffer from low population density and increasing population aging and outmigration (Besser & Miller, 2013;Frazier et al., 2013;Lamb & Sherman, 2010;Leung & Murray, 2009;Shields, 2005). In addition, household incomes tend to be lower than in urban areas (Shields, 2005;Mickiewicz et al., 2016;Yu & Artz, 2019). ...
Book
Drawing from empirical analyses, case studies, and a synthesis of best practices, this book explores how innovation manifests itself in rural places and how it contributes to entrepreneurial development and resilience. Innovation in rural places may come about as a result of new forms of collaboration; policies that leverage rural assets and address critical service or product gaps; novel strategies for accessing financial capital; infusion of arts into aspects of community life; and cultivation of networks that bridge entrepreneurs, organizations, and institutions. The chapters illustrate how a number of innovation-related characteristics relate to economic vibrancy in rural places such as a strong connection to the arts, adaptive and sustainable use of natural resources, value-chain integrated food systems, robust bridging social capital networks, creative leveraging of technology, and presence of innovation-focused entrepreneurs. Through exploration of these and other topics, this book will provide insights and best practices for rural community and economic development scholars and practitioners seeking to strengthen the rural innovation ecosystem.
... Det er langt fra unikt. Mange steder langs kysten har opplevd det samme, og tilsvarende har skjedd ute i Europa og i USA (Copus & Skuras 2006;Besser & Miller 2013). Stedene og kommunene vi har studert, er små, og virksomhetene som har vaert der, har også vaert små. ...
... Men trolig krever det arbeid på mange plan, og at noen -inkludert kommunen -tar tak, slik man gjorde i Hasvik. Det finnes også mange internasjonale studier som tyder på at offentlig tilrettelegging kan hjelpe på utviklinga av lokalt naeringsliv (Besser & Miller 2013;Esparcia 2014). En utfordring for Badderen er at det knapt finnes noen å hjelpe. ...
... Algunos autores mencionan el papel de las Tecnologías de la Información y la Comunicación (TIC) en la promoción del desarrollo territorial y económico (Acs, 2006;Akgün, Baycan-Levent, Nijkamp, & Poot, 2011;Boza, Marcos, Cortes, & Mora, 2016;Koyana & Mason, 2017;Morris & James, 2017;L. Pato & Teixeira, 2018;Ratten, 2018;Zaremohzzabieh et al., 2016), motivando la repoblación y revitalización de las áreas rurales (Akgün et al., 2011;Anthopoulou et al., 2017;Besser & Miller, 2013). Por tanto, las personas fuera de la ruralidad ven la posibilidad de desarrollar negocios y mejorar su calidad de vida (Hansson & Kokko, 2018;Kordel, 2016;Migliore, Schifani, Romeo, Hashem, & Cembalo, 2015;Mottiar et al., 2018). ...
... Bird and Wennberg (2016) find that both having family members in geographical proximity and obtaining family financial capital increase immigrant entrepreneurs' likelihood of remaining in entrepreneurship in Sweden. Strong social ties may facilitate financing a start-up venture locally, help an entrepreneur attract and retain skilled labor, and may lead to increased community support for the business once opened (Onyx and Bullen 2000;Besser and Miller 2013). The location-specific returns to human capital may also be associated with local knowledge of the resources that can be exploited in a local area, which lowers the costs of production for the potential new firm. ...
Article
Full-text available
This paper investigates entrepreneurship and location choices among college-educated individuals in the USA and the role of location-specific human capital in these choices. We model the location and entrepreneurship decisions jointly, demonstrating that individuals who choose a rural residence are more likely to become entrepreneurs when compared to their urban peers. We then explore whether, all else equal, the entrepreneurship choice of rural alumni lowers earnings, consistent with the story of business location choice being motivated by the entrepreneurs’ preference for a rural lifestyle, whether there is evidence that the location choice is productive, or whether rural residents are pushed to start a business due to thin labor markets. After controlling for selection, rural entrepreneurs earn significantly more than rural workers but still less than urban entrepreneurs, lending support to the notion that rural entrepreneurs’ location choices are productive and rural entrepreneurs have stronger location preference. An Oaxaca decomposition of the earnings gap across subsamples reveals the returns to entrepreneurial skills are much lower in rural areas; however, the earnings gap between rural and urban entrepreneurs is at least partially offset by positive self-selection into a rural area. This finding lends support to “grow your own” business development strategies for rural regions. © 2018 Springer Science+Business Media, LLC, part of Springer Nature
... Policies within areas such as opportunity, capital, ability, incentives and motivation (Hoffmann, 2007) across different target groups (Stevenson and Lundstrom, 2007) may be implemented at different levels (Gilbert et al, 2004;Minniti, 2008) to foster entrepreneurial activity. Research has shown that entrepreneurship policies differ across countries and regions (Heinonen et al, 2010;North and Smallbone, 2006;Bennett, 2008;Murdock, 2012;Besser and Miller, 2013), and while some governments are committed to supporting entrepreneurship, others are more passive, relying on market forces to regulate the supply of, and demand for, new ventures. The choice to support entrepreneurship is an active, strategic choice made by governments at all levels. ...
Article
This paper examines how the orientation of local governments towards entrepreneurship influences the organization and adaptation of local entrepreneurship policy. Entrepreneurship policy has long been investigated; however, the organizational aspects of policy delivery efforts seem to have gone unnoticed. Adaptability and collaboration are two organizational factors that are central to the configuration of local entrepreneurship support systems. However, as hypothesized in this paper, the level of collaboration and adaptability depends on the entrepreneurship orientation of the local government. In contingency theory, strategy is a determinant of organizational structure, and the entrepreneurship orientation of governments is such a strategy. Based on a survey of 86 (out of 98) municipalities in Denmark, the paper concludes that the more positively oriented the local government is towards entrepreneurship in its policy making, the better the adaptability and collaboration in the entrepreneurship support system.
... Overall, examinations of local culture go beyond rational, firm-centric approaches to understanding entrepreneurial action and underscore the fundamental role of the local society in shaping entrepreneurial values, possibilities, and outcomes (Dana, 1995;Julien, 2007). Specific definitions of a local entrepreneurial culture in the literature have included community social capital (Besser & Miller, 2013;Kwon, Heflin, & Ruef, 2013;Roxas & Azmat, 2014), community entrepreneurial climate (Chatman, Altman, & Johnson, 2008;Goetz & Freshwater, 2001), the institutional environment (Fortunato & McLaughlin, 2012;Frazier et al., 2013;Kibler, 2013), or a set of social norms (Hopp & Stephan, 2012;Klyver & Thornton, 2010). While each study recognizes and examines an important aspect of a local entrepreneurial culture, none of them fully encompass the inherent richness of the concept. ...
Article
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This article proposes a scale that measures the local entrepreneurial culture of a place based on residents’ perceptions. The initial 36-item pool was developed through semi-structured interviews with entrepreneurs and non-entrepreneurs in Kentucky (USA) and then reviewed by a focus group composed of entrepreneurship coaches. These items were included in an extensive survey of rural and urban Kentuckians. Factor analysis resulted in a 17-item scale with four major components. To ascertain the predictive validity of the subscales, a series of analysis of covariance (ANCOVA) models evaluated their correlations with county-level rates of entrepreneurship obtained from an independent data set. The analysis confirmed that perceptions of the local entrepreneurial culture do correlate with entrepreneurial activity. In line with the theoretical model presented in this article, the ANCOVAs also controlled for the modulating effect of important individual-level characteristics and regional factors. The proposed scale is recommended for use by entrepreneurship support programs that provide one-on-one assistance for small businesses, yet seldom assess nor consider how they might improve the entrepreneurial culture of the place where these businesses operate. Furthermore, this measure is an important contribution to entrepreneurship research. Existing measures of entrepreneurial culture focus mostly on the regional and national levels, overlooking the role of local cultural characteristics; they also tend to focus on general cultural attributes rather than on residents’ perceptions of the entrepreneurial climate. This entrepreneurship culture scale opens the door to new directions in research.
... The exploitation of business networks might create additional entrepreneurial opportunities through co-developments and spillovers. Similar studies focusing on the link between social capital and entrepreneurs' successes and the rural communities' development have also been completed by Besser and Miller (2013) and Poon, Thai, and Naybor (2012). ...
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p>This paper examines the importance of metropolitan spillover effects on the economic growth of non-metropolitan counties in the state of Indiana by using panel data from 2003 to 2013. I hypothesize that metro economic size and non-metro counties’ locations, along with other metro social and economic factors, will have significant impact on non-metro counties’ economic growth. Based on the results from the Random-effects Generalized Least Squares (GLS) and the population-averaged Generalized Estimating Equations (GEE) regressions, metro GDP and population have significant, positive impacts on non-metro counties’ economic growth, while non-metro counties’ locations (i.e., the distance to a metro county), metro K-12 school enrollment, the wage gap and the number of commuters between metro and non-metro areas have significant, negative effects on the economic growth of non-metro counties in Indiana. Some of the dummy variables also showed significant association with the non-metro counties’ economic well-being.</p
... The exclusion from important markets can limited the potential to innovate and as such may jeopardise the adaptability and survival of enterprises in more peripheral areas (McAdam, Reid, and Shevlin 2014). This can make efforts to boost networking, internationalisation and the provision of relevant infrastructure key in overcoming the problems imposed by a region's peripheral nature (Arbuthnott and von Friedrichs 2013;Besser and Miller, 2013). On the order hand, it should also be acknowledged that rural areas even in peripheral regions often have a strong tradition of small business ownership (Keeble and Tyler 1995;Warren-Smith and Jackson 2004;North and Smallbone 2006;Brooksbank, Thompson, and Williams 2008). ...
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Despite a growing body of research on firm survival, little is known about the factors impacting upon survival rates at a micro-spatial level. This study, therefore, analyses firm survival across local environments in the context of a peripheral region; namely, the case of Wales in the UK. It examines how theories relating to human capital, growth motivation and locational conditions may explain survival within a region. Drawing on data of survival patterns for a cohort of firms, it is found that each of the three theories at least partly explain firm survival, with it being clear that human capital relating to the experience of entrepreneurs, as well as the growth motivation of their firms resulting from the strategic choices they make, impact upon rates of survival. It is also found that the local environment contributes to the likelihood of survival. In particular, it is found that locational factors have a potential influence on the human capital allocated to enterprises, as well as how this capital is utilised via growth motivation. This suggests that not only do locational factors contribute to differing rates of entrepreneurship, but that such factors also impact on the durability of firms over time.
... Entrepreneurship in rural areas is typically associated with distinctive challenges, such as small and specialized economies (Rizov 2006), the distance from markets and suppliers, and difficulties with access to skilled labor and business infrastructure (Smallbone, et al. 2002;Smallbone, Baldock, and North 2003;Smallbone 2009;Siemens 2010;Anderson, Osseichuk, and Illingworth 2010;Besser and Miller 2013). In comparison, urban areas can build on positive agglomeration effects. ...
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This paper studies firm entries and exits in Estonian urban areas, urban hinterlands, and rural peripheries following EU accession, and it analyzes the effects of changes in population density, employee income level, unemployment, and economic climate on firm entries and exits. It concludes that the firm entry rate exceeded the exit rate in all of the years between 2005 and 2012. The urban hinterland is characterized by the highest level of both entries and exits. The fixed-effect regression models show that income and recession, which are the most significant factors to impact on local entrepreneurship, have a similar effect on different municipality types.
... Rural areas have a higher proportion of small business owners than urban areas [181]. motivated to start businesses to incur massive profits, but rather to fill local resource needs and/or provide for their families [13]. ...
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HCI researchers are increasingly conducting research in rural communities. This paper interrogates how rurality has been treated in previous HCI research conducted in developed and high-income countries. We draw from research outside of HCI to suggest how we can effectively engage with rurality in research. We present results of a scoping review of HCI literature that asks: 1) How do HCI researchers define rurality?; 2) How do the unique characteristics of rural communities enter into study findings?; 3) What methods are used in rural research?; and 4) Where has rural research been conducted? More than twice as many rural HCI articles have been conducted in low-income and/or developing countries than in high-income and/or developed countries. HCI researchers rarely define rurality, and when they do, they primarily define it using descriptive rather than sociocultural or symbolic definitions. Rural research findings have primarily addressed infrastructure and distance/geographic isolation as unique rural characteristics, while qualitative, observational, and cross-sectional methods dominate this research. There are further opportunities for HCI research to more productively advance understanding of what rurality is, and how it matters for sociotechnical systems.
... In line with this, the literature on regional developmentincluding that on smart specialization and development (Foray et al., 2012)emphasizes the importance of place-specific resources as key factors of innovation, particularly in rural areas (Naldi et al., 2015). They may be facilities, materials, or inputs that constitute a comparative advantage for a territory (Besser and Miller, 2013). However, this notion also refers to more immaterial characteristics of the region, such as those related to its history (Cainelli and Iacobucci, 2016). ...
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A growing literature highlights the development of specific innovative patterns in peripheral areas and the need to better understand how and why firms can innovate despite the absence of agglomeration effects. These peripheral areas can, among other things, offer local resources (material and immaterial) for developing environmental innovations. Thus, the aim of this article is to gain a more in-depth understanding of innovation processes in peripheral areas by analyzing the dynamics of utilization of local (i.e. place-based) and extra-local resources for the building and development of eco-innovative projects. We adopt an evolutionary framework inspired by the literature on eco-innovation and geography of innovation, which articulates internal organizational factors and those external to eco-innovative organizations, including place-based factors. We use and enhance a mixed method borrowed from economic sociology that enables us to quantify the external resources utilized throughout the innovation process (nature, means of acquisition and location), through narrative analysis. We analyze five agro-food projects located in rural areas. Based on in-depth interviews, we identify 196 external resources that were utilized for developing these projects. We find that these projects are strongly embedded in their local environment and rely, to a large extent, on local resources and networks, which shows that, even in peripheral areas, the local context can be conducive to innovation. However, these eco-innovation processes are not confined to the local sphere; indeed, their stakeholders are able to tap into specific, more-distantly located resources and market opportunities, and do so increasingly as the projects develop. The results also point to the different roles of institutional and market actors in the acquisition of resources, according to their nature and location, and highlight the importance of institutional actors at the regional level.
... In fact, rural entrepreneurs by and large don't start businesses to reap large profits. Rather, rural business owners are more likely to be concerned about providing for family and offering needed resources in their community [1]. This means that an expectation of economic growth and expansion does not reflect the reality of most rural entrepreneurs. ...
Conference Paper
Researchers and designers understand that social technologies need to be designed and understood from the perspective of many different geographies and identities. This provocation argues that, unless we abandon growth and scalability as metrics of success in social technologies, we will never be able to appropriately design for rural places.
... Due to lower population densities, rural businesses are often further from customers and suppliers and experience difficulty attracting and retaining skilled workers and support services. As a result, entrepreneurship remains an important but challenging goal for sustaining rural communities (Besser & Miller, 2013). ...
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Entrepreneurship is widely recognized as a driver of rural economic growth and community vitality. Nebraska Extension personnel developed a youth entrepreneurship curriculum-EntrepreneurShip Investigation (ESI)-for middle and high school students. This curriculum has been used at 4-H summer camps, for formal classroom and out-of-school instruction, and in additional educational environments. A preliminary survey of ESI program participants and educators showed positive entrepreneurship learning, attitudes toward business creation, and plans for further relevant educational pursuits. These results suggest that the ESI curriculum produces positive entrepreneurship outcomes for youths and identify the need for further research into the efficacy of the curriculum.
... Kilkenny et al. (1999) noted that economic business success comes from both the service of an entrepreneur to their community and the reciprocated business support from the community. Communities with higher levels of social capital, specifically bridging capital (heterogeneous connections and relationships), are better equipped to support their local entrepreneurs (Besser & Miller, 2013). Communities that support small businesses are able to help individuals develop sustainable livelihoods and self-reliance (Marais & Botes, 2006). ...
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Which skills must community members acquire and nurture to become successful local entrepreneurs in the communities in which they live and serve? Local small businesses are important community assets, and local wellbeing can be improved through entrepreneurship. Existing research shows only partial agreement on the skill dimensions that make up this required skillset, and a comprehensive skill framework has yet to surface. SCORE, a longstanding and successful US community economic development program, trains individuals in the skills necessary to start and successfully operate a small business. This article presents a qualitative, exploratory study of the skills developed through SCORE counseling that are associated with small business success. The SCORE skill dimensions are compared to a prominent practice-based model. The comparison reveals unique aspects of the SCORE skill dimensions not mirrored in other studies. Finally, this study opines how the study findings extend research regarding small business and community development.
... For Western countries, however, there is less research. Examples are Besser and Miller (2013) on U.S. rural entrepreneurs, Civelek et al. (2019) on Slovak weak funding bias compared to Czech Republic, and Khanal and Omobitan (2020) on factors influencing credit constraints of farms in the U.S. In face of bank credit restrictions, trade credit may act as a substitute or a complement to bank financing: ...
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Access to external finance is a key challenge for the creation, survival and growth of SMEs. This article delves into the “weak funding” handicap of rural small firms (SEs): the access to bank financing and the substitutive role of trade credit for entrepreneurs in rural areas when they faced bank credit constraints. Considering SEs in Galicia (Spain), a paradigmatic case in Europe of rural areas in demographic decline with a strong impact of the Spanish sovereign and banking crisis of 2008–2012. There’s evidence of firms in rural areas facing a differential negative flow of bank credit during the financial crisis, especially in the manufacturing and construction sectors, that dissipated afterwards. Then, using a panel data approach that considers the determinants of trade credit, the complementary and substitutive hypotheses are tested to estimate the impact of bank credit restrictions over trade credit.
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The purpose of this research is to understand: (1) the main themes that appear to contribute to entrepreneurial success, (2) the various combinations of antecedents that can lead to entrepreneurial success, and; (3) the role that travel plays in entrepreneurial success. We first use a qualitative methodology to assess the themes that emerge in our conversations with 14 highly-successful Canadian entrepreneurs. The main categories that emerged from our interviews that contribute to entrepreneurial success involve: learning, travel, adversity quotient, and mentorship. From these results, we conduct a qualitative comparative analysis (QCA) and find that the input variables that were most important to entrepreneurial success were: learning, experiencing failure, learning from mentors, and adversity quotient. The contributions to knowledge of this research are twofold. First, we show that travel is an important construct to entrepreneurial success, which is significant as travel has largely been omitted from the entrepreneurship literature. Second, we show that entrepreneurial success is dependent on a complex combination of variables of varying levels of importance.
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Utilizing the Community Capitals framework we examine the impact of Community Reinvestment Act (CRA) reported small business lending on the economic well-being of Texas counties in 1999–2000. We combine data from multiple data sources, including the County Federal Financial Institutions Examination Council (FFIEC) annual county Aggregate and Disclosure data—collected under directive of the 1977 Community Reinvestment Act—and use GeoDa to model the impact of small business lending in each Texas county from 1996–1999 on the 1999 county poverty rate, median family income, Gini income inequality coefficient, 2000 per capita income and 2000 nonfarm earnings per worker. Controlling for other dimensions of the Community Capitals Framework, the results show positive effects of small business lending on two income measures—per worker nonfarm earnings, and per capita income. Furthermore, we find the small business lending from 1996–1999 reduced poverty and income inequality in the most rural Texas counties. Implications for theory, policy, and research are discussed.
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Despite the escalated interest in entrepreneurship, scholars have underexamined the role of social capital in determining entrepreneurial intention. This research attempts to examine how social capital matters in enhancing the intention of becoming an entrepreneur in the rural community. The method adopted in this work was a quantitative research approach using a survey model. The respondents of this survey were collected from the rural community in a selected area in Indonesia. Furthermore, to test the relationship between variables, we used Structural Equation Modeling Partial Least Squares (SEM-PLS) to regress the data. The findings of the study confirm that social capital has robustly influenced the intention of being an entrepreneur. However, the perceived desirability of entrepreneurship failed to mediate the linkage between social capital and entrepreneurial intention. The findings have several implications for the government in developing economic growth and entrepreneurship in the local community.
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This article considers how we conceive and research rural entrepreneurship. While we argue for the importance of context for understanding entrepreneuring, we also acknowledge that some perceptions of the rural context may be misleading. We critically review how the rural in rural entrepreneurship has been applied. We find how some romancing of the rural has had detrimental effects in theorizing about rural. However, we also find and discuss the interesting range of relationships between the rural and the entrepreneurship presented in the literature. We conclude that a conceptually robust approach can be achieved by examining the nature and extent of entrepreneurial engagement with the contexts that characterize the rural. Finally, we propose methods that will enable us to achieve better understanding of the processes of rural.
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Access to financial capital is vital for the sustainability of the local business sector. Recent research on the restructuring of the financial industry from local owned banks to interstate conglomerates has raised questions about the impact on local economies, especially in rural areas. We examine the impact of bank ownership concentration on business formations, continuations, and deaths in metropolitan, micropolitan, and rural non-core U.S. counties. Using limited-access Census data, we find that local bank concentration is positively related to business births and deaths, or churn, in rural counties, but the opposite effects occur in metropolitan areas. We demonstrate robustness to several specifications and spatial spillover effects.
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The purpose of this article is to focus on the role of the legal structure of ventures for the event of the entrepreneurial exit. Specifically, this study is to reveal the different effects of incorporated and non-incorporated legal structures of ventures on diverse exit routes. Using the Kauffman Firm Survey, this study investigated the relationship between the legal structure of ventures and their exit routes with a sample of 901 single-founder start-ups that were founded in 2004 and exited during 2005 to 2011 period. The finding of this study confirmed that ventures with an incorporated legal structure were less likely to exit by sale than ventures with a non-incorporated legal structure. While little research has considered the legal structure of ventures as a predictor of different exit routes, this study empirically suggests the importance of considering the forms of the legal status of ventures in studying entrepreneurial exit routes.
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The workforce potential offered by immigrants is perceived as one solution for the sustainable operation of many rural companies. Still, diversifying the workforce and recruiting immigrant employees represents not only a significant organizational change for rural small and medium-sized enterprises (SMEs) but can also reflect on their legitimacy in the eyes of the local community. In this study, we examine the legitimation strategies rural SMEs use in order to justify the decision to employ immigrant workers as socially accepted. The theoretical framework builds on the discussion concerning legitimacy and legitimation. By analysing the interviews with the representatives of 35 rural SMEs, we identified three legitimation strategies used to justify the decision to recruit immigrants, based on owner-managerial values, immigrants as good workers and the economic, demographic and social context consequent upon rural location. The aim of the legitimacy strategies is to convince rural community members in perceiving the recruitment of immigrant employees as favourable and preferable. Our study demonstrates that for rural SMEs, recruiting immigrant workers is not just an economic or bureaucratic procedure but entails social aspects as well. These social aspects need to be taken into consideration in order to maintain the business legitimacy.
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Using data on a sample of small Iowa towns consistently collected over two decades, we investigate how agglomeration economies, social capital, human capital, local fiscal policy, and natural amenities affect new firm entry. We find that human capital and agglomeration are more conducive to new firm entry than are natural amenities, local fiscal policy, or social capital. The impact of local fiscal policy is too small to overcome the locational disadvantages from insufficient endowment of human capital and agglomeration. A rural development approach that encourages firm entry in rural towns with the largest endowments of human capital and market agglomeration would be more successful than trying to raise firm entry in every town.
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Access to financial capital is vital for the sustainability of the local business sector. Recent research on the restructuring of the financial industry from local owned banks to interstate conglomerates has raised questions about the impact on local economies, especially in rural areas. We examine the impact of bank ownership concentration on business formations, continuations, and deaths in metropolitan, micropolitan, and rural non-core U.S. counties. Using limited-access Census data, we find that local bank concentration is positively related to business births and deaths, or churn, in rural counties, but the opposite effects occur in metropolitan areas. We demonstrate robustness to several specifications and spatial spillover effects.
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This paper explores the role of entrepreneurial orientation in addressing upward mechanisms of Indian immigrant workers in rural areas. To achieve this purpose, an empirical analysis was carried out to investigate how entrepreneurial orientation may affect mechanisms of professional transition. Precisely, we managed direct interviews among Indian workers (through the support of cultural mediators), local actors (like public and private advisors) and Italian entrepreneurs. Our funding suggests the presence of three Indian workers in Italy (simple workers, intrapreneurs, entrepreneurs), characterised by different entrepreneurial profile acting as engine or barrier to what we have labelled as “upward transition”. Immigrant entrepreneurs play a relevant role in Italy and in our point of view, it is of paramount importance to allow them to access to rural development policies, knowledge, training and education upgrading.
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The development of a sustainable rural world must have an innovative agri-food industry as one of its bases. This article offers a comprehensive analysis of the main drivers of innovation by small and medium agri-food companies in Spain. A combined multiple correspondence analysis (MCA) and structural equation modelling (PLS-SEM) is performed to identify the key factors among 63 indicators in the domains of the technology-organisation-environmental approach. The results suggest an open field of research. Positively related to innovation are firm capacities and financial resources. Moreover, agri-food firms innovate in products, processes or marketing in order to increase sales, enter new markets, or increase the quality of their products. On the contrary, most of these firms did not innovate to reduce costs or time of response, meet regulatory compliance or maintain employment. Authorities should be aware that smaller and younger agri-food firms face more restrictions to innovate, and firms feel public policies could help to meet market demand as a driving force of innovation. On the contrary, essential objectives of regional development such as environmental compliance and maintaining employment seem to depend solely on public action.
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The purpose of this study is to investigate the influence that national levels of social capital have on entrepreneurial activity. Specifically, we argue that national and regional level social capital positively influences the ability of entrepreneurs to mobilize and access important resources thereby positively impacting the rate of entrepreneurship within nations and regions. Design/methodology/approach We advance a multilevel and multidimensional conceptualization of social capital. Then based on a dataset of 68 nations and 665 within-nation regions, we empirically evaluate the effects of social capital at the national and regional level in explaining differences in entrepreneurial activity across nations and regions using a combination of regression analysis and multilevel hierarchical linear modeling (HLM). Findings Our findings emphasize the importance of formulating a multilevel conceptualization of social capital for entrepreneurship research. We discuss the results, provide implications for public policy and suggest avenues for future research. Originality/value The overwhelming majority of entrepreneurship research focused on investigating the implications of social capital reside at the individual level of analysis. Our unique inquiry is an inaugural effort to consider this important implications at the macro and meso-level of analysis by examining both regional and national-level effects.
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Problem, research strategy, and findings Disaster assistance in the United States has faced criticism for widening the unequal impacts of disasters, but little is known about whether and how this phenomenon applies to businesses. Small businesses make up most businesses in the United States, but they are particularly vulnerable to hazards given their relative lack of capital. Because recovery assistance to businesses is primarily loan based, this lack of capital can create conflicts in how aid is perceived and allocated. Assistance providers must balance aiding the most severely damaged businesses and lending to those that will be able to repay; for small business, the threat of additional debt can make even low-interest loans seem risky. With this research I attempted to better understand how these competing factors play out in recovery through regression analyses of approved loan amounts and loan utilization decisions in Galveston (TX) after Hurricane Ike. I found that businesses with higher repayment ability such as larger businesses, older businesses, and corporations were approved for high loan amounts. Smaller businesses, businesses with higher damage, and businesses with longer loan terms were less likely to use the loans in their recovery, despite being approved. These findings suggest that businesses with the resources to recover were more likely to be the ones benefiting from additional disaster assistance. Takeaway for practice These findings suggest that planners may need to create their own recovery programs specifically targeting subgroups of businesses that are important to their communities. Although important to many economic development initiatives, very small businesses, entrepreneurs, and sole proprietors may not benefit from federal assistance, particularly if they were severely damaged.
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Regions feature specific network structures, identities and knowledge. These characteristics resemble social capital, which is recognized as contributing to entrepreneurship and innovation. This study examines whether entrepreneurial advantages, which are generated by social capital in a regional context, exist in a sustainable perspective. According to the competence-based view, sustainable competitive advantages are based on core competencies, which are valuable, rare and transferable to several markets. Therefore, this study examines social capital as a regional core competency and transfers the competence-based view to a regional context. This is achieved on the basis of the Hallertau region, a hop-planting area in Germany. The paper analyses whether network structure, knowledge and identity, as building blocks of social capital, display core competence quality. As such, this study contributes to the discussion on whether an enterprise's regional embeddedness matters with respect to its sustainable competitiveness.
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Kibbutzim in Israel constitute a particular type of traditionally collective oriented communities, the first of which has been established in 1909. This paper aims to investigate the impact of environments upon motivations of entrepreneurs. More specifically, I explore internal and external motivations of entrepreneurs in three institutionally different mezzo environments in the larger context of the Israeli society. Based on a combination of convenient and snow-ball sample, students interviewed 360 entrepreneurs via a questionnaire. The sample includes 88 entrepreneurs living in collective kibbutzim, 107 entrepreneurs in differential kibbutzim and 165 entrepreneurs living in Israeli cities. Both types of kibbutzim are communities in the classical sense. When comparing external and internal motivation between the three environments I found that entrepreneurs in collective kibbutzim rate significantly lower on external motivational items than entrepreneurs in differential kibbutzim and in cities. Entrepreneurs in differential kibbutzim rate significantly lower on internal motivation items than entrepreneurs in collective kibbutzim and in cities. The study shows not only that environments influence entrepreneurial motivations but also points to the importance of analysing particularities of communities. Thus, the paper contributes to the understanding of community-based entrepreneurship and illustrates the importance to account for specific characteristics of communities.
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Despite the recognition of entrepreneurship as one of the main determinants of rural economic development, empirical research in this field is relatively sparse. Thus, there is little evidence on the role and function of rural entrepreneurs, the driving force behind the birth, survival and growth of rural enterprises. The present work aims at providing a contribution to filling this gap in knowledge. We present and analyse the results emerging from a questionnaire submitted to a sample of 123 rural entrepreneurs and businesses in a mountainous area of central Italy. In particular, we test for six hypotheses concerning the correlation between different factors, reflecting entrepreneur and business-specific characteristics, and the adoption of instruments of institutional assistance. Entrepreneur's and business's variables are related to (1) entrepreneurial human capital; (2) entrepreneur's local knowledge and social capital; (3) firm's size; (4) entrepreneur's age; (5) firm's age; and (6) busines's sector of activity. Empirical results largely support the importance of variables taken into consideration in explaining differences in the adoption of institutional assistance among businesses of the sample. In the light of our empirical findings, we also examine and propose potential policies for fostering entrepreneurship and the development of the rural region under study.
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The role of personality traits in the decision to start a business and to maintain it successfully is discussed controversially in entrepreneurship research. Our meta-analysis builds upon and extends earlier meta-analyses by doing a full analysis of personality traits that includes a comparison of different traits from a theoretical perspective and by analysing a full set of personality predictors for both start-up activities as well as success. Theoretically, our article adds to the literature by matching traits to the tasks of entrepreneurs. The results indicate that traits matched to the task of running a business produced higher effect sizes with business creation than traits that were not matched to the task of running an enterprise, corrected r = .247, K = 47, N = 13,280, and corrected r = .124, K = 20, N = 3975, respectively. Moreover, traits matched to the task produced higher correlations with success, corrected r = .250, K = 42, N = 5607, than traits not matched to the task of running a business, corrected r = .028, K = 13, N = 2777. The traits matched to entrepreneurship significantly correlated with entrepreneurial behaviour (business creation, business success) were need for achievement, generalized self-efficacy, innovativeness, stress tolerance, need for autonomy, and proactive personality. These relationships were of moderate size in general and, moreover, heterogeneity suggested that future research should analyse moderator variables.
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The present paper examines the operation of business networks and the associated level of innovative activity in rural areas of the European Union by adopting a macro view. The empirical evidence is derived from field work carried out in 12 European Union areas located in six member states in the framework of a European Union funded research project. Results show that the spatial extension of business networks and businesses' innovative activity are highly influenced by a region's accessibility to central markets taking into account its level of economic development.
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This article assesses the motives for membership of associations by established SMEs with one or more employee. The article concludes that membership motives span a complex ‘bundle’ of services, ranging from individual supports to collective lobbying. Bundling gives advantages of scale and scope to specialist providers, but also combines individual and collective benefits in order to mitigate the effects of free riding. Established SMEs also seem to look on associations, as a whole, as a bundle, belonging to an average of 1.85 associations per firm. There is some size segmentation of the association market, but, in general, size variation appears less important than the target markets which associations cover: the sector (trade and professional bodies), the locality (chambers of commerce), the specificness of the SME (such as FSB, FPB), or the role of the SME owner as director (such as IoD).
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This paper discusses the preconditions and strategies of local development and turnaround in difficult surroundings such as peripheral rural communities. Its key premise is that local decision makers’ beliefs of how such small economies function and of ‘proper’ interventions are critical. Such thought patterns were studied among Finnish rural municipality directors (RMDs), using comparative cause mapping. The findings show that while private initiative, entrepreneurship, is regarded as key for development, prevalent views of entrepreneurship, especially firm formation, are unsophisticated, stressing personal traits and social factors such as supportive cultures and role models. Paralleling these views, the current developmental doctrine is indirect, focused on resource provision and implying passive waiting for entrepreneurs to emerge before developers ‘can’ act. Considering their bleak perspectives, the paper argues that communities with weak autonomous turnaround capabilities need more interventionist strategies than those builtin the dominant paradigm, whereas current resource-providing models may be suitable in more benevolent environments. To augment the dominant thinking, the paper suggests an initiating ‘business-based development model’ as a parallel approach for a more effective local economic development in difficult surroundings.
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Contact networks as a means of obtaining external information are a well-accepted aspect of firm behavior. For large firms, formal ties, such as strategic alliances and joint ventures, are common, but for small firms more flexible, informal connections are the norm. In addition, semi-formal flexible manufacturing networks have evolved within the US as a means for firms to identify similar and compatible firms for cooperative activities. This paper examines the behaviour of firms with regard to the role played by networks in information flow and, at least speculatively, in firm competitiveness. Data come from interviews with firms throughout the US, in both rural and urban settings. Formal networks may be less critical in urban agglomerations, where proximity may provide advantages through informal interactions. Comparisons with industrial districts in Europe provide scope for understanding the role of information in firm behaviour.
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Purpose Since the 1950s, organizational psychology research investigating work‐related motivation has progressed from static content models to dynamic process models. Entrepreneurship research has evolved along a similar trajectory, adapting organizational psychology findings to better understand the motivation to become an entrepreneur. This paper reviews motivation research from both fields, explores some of the commonalities among current theories, and presents a new model of entrepreneurial motivation. Design/methodology/approach In an exploratory study, the ability of tolerance for risk, perceived feasibility, and perceived net desirability to predict intentions for self‐employment is examined in a sample of 114 undergraduate business students at Florida Gulf Coast University. Findings Results indicated that tolerance for risk, perceived feasibility and net desirability significantly predicted self‐employment intentions, with an adjusted R ² of 0.528. Research limitations/implications Because the sample consisted entirely of undergraduate business students, findings may not be generalizable to non‐student populations. This research did not examine the role of negative motivations, or “push” factors. The cross‐sectional rather than longitudinal design of the study raises the usual caveats regarding lack of causal evidence. Finally, a limitation of any survey research is the inability to ask follow‐up questions and explore in more depth the reasoning behind any finding. Future research including qualitative interviews and/or focus group sessions could therefore provide rich explanatory information that could add value to the survey data. Practical implications As a result of this research, educators, government officials, and others interested in stimulating entrepreneurial motivation should consider how their words and actions affect potential entrepreneurs’ perceptions of entrepreneurial feasibility and net desirability. Originality/value Although the model is original and unique, it is based on established theories and models. It provides a well‐supported explanation of the motivation to become an entrepreneur that will be useful to potential entrepreneurs and those who encourage and guide them.
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The present work provides an integrated view of rural entrepreneurship and sets the agenda for future research in the area. Rurality defines a territorially specific entrepreneurial milieu with distinct physical, social and economic characteristics. Location, natural resources and the landscape, social capital, rural governance, business and social networks, as well as information and communication technologies, exert dynamic and complex influences on entrepreneurial activity in rural areas. Rurality is viewed as a dynamic entrepreneurial resource that shapes both opportunities and constraints. Rural entrepreneurship is depicted as a three-stage sequential process highly influenced by specific territorial characteristics. The proposed research agenda addresses issues related to theoretical studies concerning entrepreneurial processes in rural areas and more applied issues concerning the formulation of integrated and competent policies supporting entrepreneurship in such areas.(Publication abstract)
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Many rural communities in the United States are economically depressed. However, while poor rural communities are geographically isolated and small, they are likely to be rich in social capital. We first argue that the nature of the social capital in such communities can either facilitate or constrain the development of business networks among entrepreneurs. We then explain the community-level conditions that might increase the probability of business network effectiveness. The primary opportunities that such networks can exploit and their potential spillover effects on economic development are also identified. Finally, we provide directions for research that can contribute to better public policy decisions.
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Theoretical models that separate social, political and environmental factors from the economics dimensions of entrepreneurship cannot account for the failed experiences in business development among very poor populations. In this article, we develop the concept of Community-Based Enterprise (CBE) and argue that it provides a potential strategy for sustainable local development. We maintain that in this emerging form of entrepreneurship, typically rooted in community culture, natural and social capital are integral and inseparable from economic considerations, transforming the community into an entrepreneur and an enterprise. Drawing on interdisciplinary and multilevel approaches, we propose a theoretical model of the determinants, characteristics, and consequences of CBEs.
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Problem: Many policymakers and planners believe that entrepreneurship is key to rejuvenating American communities amid continued pressures of globalization and technological change; yet, despite its present popularity, we still know relatively little about the influence of different types of locations on new business creation and performance.Purpose: This study examines how new firms' entry, survival, and growth differ among central cities, suburbs, small cities, and rural areas inside and outside metropolitan areas, to allow policymakers and planners to develop more informed development strategies.Methods: I use a unique establishment-level longitudinal database to examine the formation, survival, and growth of new manufacturing and advanced services firms in the continental United States using a mix of descriptive and inferential statistical methods.Results and conclusions: This study shows that entrepreneurial performance differs across a continuum of locations from nonmetropolitan rural to urban core. New firms in central cities have higher failure rates but faster rates of employment growth in advanced services. Nonmetropolitan rural places are undersupplied with new high-tech manufacturing and both high-tech and conventional advanced services firms, and have lower growth rates in both high-tech and conventional manufacturing and advanced services. Intermediate places in the urban hierarchy (suburbs, small cities, and rural segments of metropolitan areas) often have relatively high rates of new firm entry, survival, and growth. No environment favors entrepreneurship across all sectors and performance measures.Takeaway for practice: Policymakers seeking to develop effective entrepreneurial strategies should understand the relative advantages and disadvantages facing entrepreneurs in different types of areas. Central cities' lower new firm entry and survival rates may be due to higher costs and regulatory barriers, or may be a result of their attracting riskier endeavors that also have potential for more rapid growth. The growth of firms started by rural entrepreneurs, by contrast, is constrained by limited local markets and relative isolation, and likely to benefit from strategies that expand the reach of new firms into broader markets.Research support: This research was supported by the Ewing J. Kaufman Foundation's Dissertation Fellowship program and the National Science Foundation's Doctoral Dissertation Research Fellowship program. All research using the confidential Longitudinal Database (LDB) was conducted on site at the Bureau of Labor Statistics offices in Washington, DC, and has been cleared for public distribution. The author is solely responsible for the content of this article.
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Abstract This paper develops a framework for examining the questions: Does social capital make a difference for well being in communities of place? How might rural sociologists utilize social capital to further well being in communities? The author reviews social capital literature, contrasting rational choice and embeddedness perspectives. Opting for a marriage between embeddedness and conflict theory, he introduces entrepreneurial social infrastructure (ESI) as an alternative to social capital. ESI adds to social capital the notions of equality, inclusion, and agency. Research results are presented which support the embeddedness approach: community-level action (the community field) is not simply an aggregation of individual or organizational actions within the community; social capital and ESI contribute jointly and independently to community action. Examining economic development as a form of collective action, the author concludes�the following: a) ESI contributes to economic development, and b) inclusiveness (internal solidarity) is more closely related to community self-development while industrial recruitment is better predicted by strong external ties.
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Data from a project entitled "The Future of Europe'sRural Peripheries" (FERP) are used to identify policies that appear to beworking well for rural enterprises and to propose policies needed to developthe entrepreneurial capacity of peripheral rural areas. A discussion ofexisting rural entrepreneurship policies is followed by data on the ten casestudy areas covered by the FERP project, all of which are located in Germany,Greece, Poland, Portugal, and the United Kingdom. These data include apopulation survey of 4,939 individuals and an interview survey of theowner-managers of 996 innovative small- and medium-size firms in the case studyareas. Analysis of the data indicates that most successful policy initiatives comefrom the more developed northern countries, where regional and local policyfunding ensures a good fit with local needs and circumstances. Still,entrepreneurship policy remains weak in all of the case study areas: mostpolicies focus on strengthening the competitiveness of existing firms ratherthan fostering rural entrepreneurship. The study concludes with a call for amore strategic approach to cultivating the entrepreneurial capacity of ruralareas. (SAA)
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Designated peripheral regions within the European Union (EU) have economies and standards of living which are below average. One of the primary reasons recognised by local government for this poor economic standing has been low levels of innovation within indigenous small to medium-sized enterprises (SMEs). These SMEs have difficulties in growing and exporting or being part of successful supply chains. The aim of this paper is to explore how innovation is successfully incorporated or hindered in SMEs within an EU peripheral region. An innovation model was applied in a multiple case study methodology involving 41 SMEs. Both quantitative and qualitative data were gathered and analysed. The paper concludes that SMEs must strategically plan for innovation and move beyond continuous improvement, or "kaizen," and states that such plans must avoid quick fixes and address the underlying cultural barriers to innovation, such as organisational structure, owner-manager leadership issues, a lack of empowerment and lack of use of employees' ideas and suggestions for innovation.(Publication abstract)
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Abstract Rural women have difficulty finding good jobs. Ownership of small businesses offers an alternative but the sales and income of women-owned firms are significantly lower than those of men-owned firms. Compared with men, women owners are more likely to operate smaller and newer businesses; however, these differences do not completely account for the gap in gross sales between men- and women-owned businesses. The strongest influences on business success are firm size, corporate status, and industrial sector. Though significant, the owner's gender is less important than these organizational characteristics. The factors influencing success of small businesses generally are the same for men- and women-owned businesses. More research on business networks and the start-up phase of small businesses is necessary for a better understanding of the sources of gender differences in success.
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This paper considers the increasing trend of inter–working among small firms. Networks of small firms co–operate in certain activities, such as marketing, purchasing, R&D, training or manufacturing. But does co–operation lead to innovation? To answer this question published evaluations of small firms co–operating for mutual benefit are reappraised. Inter–working among small firms is then investigated further by interviewing three network brokers. The brokers were funded by regional governments and they facilitated co–operation between small firms. These semi–structured discussions explored the key characteristics of successful networks, the responsibilities of the broker and the level of innovation occurring. Networking is primarily a competitive response. It needs to evolve into a mechanism to enable small firms to develop innovative products and processes jointly. Small firms may have to rethink their approach to co–operation, and their motives for initiating inter–working if they are to benefit fully from co–operation.
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The paper presents the processes of entrepreneurial human capital accumulation and its impact on rural business growth. Data are derived from four surveys on rural businesses in mountainous and less favoured areas in Southern Europe. Formal pathways of entrepreneurial human capital accumulation refer to education and training, while informal pathways include the cognitive processes of work and managerial experience acquisition and the non-cognitive processes of being raised within an entrepreneurial family environment and/or being raised in the area within which the business is later set-up. The studies reveal that there is a variety of processes of entrepreneurial human capital and knowledge accumulation that are case study specific. Human capital accumulation processes related to education and training or to work and managerial experience still plays the prime role in predicting successful businesses. Results indicate the need for decentralised, flexible and selective entrepreneurial human capital accumulation support programmes that take into account local idiosyncrasies and needs.
Conducting business in today's rural community environment offers social and economic promise along with uncertainty in facing the phenomenon of having fewer customers, who make fewer visits, and spend less per visit. This research highlights the importance of both community and managerial factors to performance evaluations of small rural retail and service firm owners. Using path analysis, direct and indirect effects on perceptual and financial performance were identified for a national US sample of 275 rural small-sized retail and service businesses. This study provides information from largely successful firms for developing marketing strategies and product/service offerings as a crucial step in assisting businesses in rural communities.
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This research examines the relationship between features of community social organization and the existence of two contrasting types of economic development, self-development and industrial recruitment in rural places. Self-development is an endogenous form of development relying primarily on entrepreneurism and local resources. Industrial recruitment is an exogenous form of development that seeks outside investors and firms to locate in the community. Using data collected in a statewide sample of 99 Iowa communities, we hypothesize that social infrastructure, the group-level interactive aspects of community organizations and institutions, is more strongly related to the existence of self-development than industrial recruitment. A key finding is that social infrastructure, measured by the existence of active community organizations, businesses that support local community projects, community-wide fund-raising capacity, and extra-local linkages to peer communities and state government, is positively associated with the existence of self-development. The relationship between social infrastructure and industrial recruitment is also significant but more modest. Findings indicate that a community's social organization can be a resource for development, but may be more appropriate for endogenous development efforts than exogenous ones.
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We propose that (I) social capacity, defined as the ability of people to organize and use their social capital, does influence their level of income, and that (II) this is because social capital use facilitates the flow of income-related knowledge and information between economic agents. Tests of these propositions based on a framework classifying social capital as a productive asset embedded in four types of social relations, and using data on household and community social capital for rural Canada, revealed some supportive evidence.
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Small towns are often depicted as places with many interpersonal relationships and generalized trust, or high social capital. Social capital is a resource which towns can use to solve problems and improve the local quality of life. In this paper, I determined if social capital and civic engagements have declined in small towns in the U.S. Midwest as has happened more generally and tested likely explanations for the change. Quantitative analyses of data from the U.S. Census, other secondary sources, and a longitudinal study of residents of 99 small towns were conducted. Findings revealed that social capital has declined, but one type of civic engagement improved. Towns in counties with more small farms in 1990 had more bonding social capital and civic engagement in 2004 than other towns when other factors were controlled. The proportion of local businesses had no impact on civic engagement and was negatively associated with one kind of social capital. Mixed findings about how income impacted social capital and civic engagement indicated a complex relationship. The retirement of the so called “civic generation” had minimal impact on social capital and civic engagement.
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Although gentrification is a process commonly associated with urban landscapes, rural areas in advanced economies have also experienced gentrification over the past two decades. Largely based on case study approaches, the Rural Studies literature describes transformations in the housing market, changed cultural attitudes toward the environment, political conflicts surrounding land-use planning, and heightened class polarization as outcomes of rural gentrification. The analysis in this paper extends our understandings of rural gentrification in two fundamental ways. First, drawing on US census data from 1990 and 2000, the paper systematically examines gentrification in nonmetropolitan counties across the United States and develops a methodology for identifying areas with similarly strong evidence of gentrification. The second section of the analysis compares the geographic distribution and socioeconomic change in gentrifying counties with the rest of nonmetropolitan America emphasizing the changes in the baby boomer and Latino populations. In so doing, the analysis opens up new possibilities for comparative analysis of gentrification both between and within countries, connects our understandings of rural gentrification to other processes of globalization playing out within rural space, and argues for work on rural gentrification to more explicitly integrate questions surrounding race and ethnicity alongside questions of class.