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Rural Entrepreneurship in a Time of Recession

Author

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  • Figueroa-Armijos María
  • Dabson Brian
  • Johnson Thomas G.

Abstract

Economic recessions increase costs, risk, stress, uncertainty, and business failures while decreasing the availability of employment. Individuals who seek to become self-employed in recessionary times, whether out of need or for opportunity reasons, face difficult and unique circumstances. We use cross-section repeated-measures rare events logistic regression to model the effects that living in rural America and changes in the economy have on the probability of individuals engaging in necessity or opportunity entrepreneurial activities both before the recession (2005–2007) and during the recession (2008–2010). Key findings indicate that before the recession, individuals living in rural metro and nonmetro counties were more likely to engage in opportunity-driven entrepreneurial activities when compared to individuals living in more urban counties. Positive employment growth rates before the recession also increased the probability that individuals in rural areas would engage in opportunity entrepreneurship. The recession marked a shift in the motivation of individuals in rural America to become self-employed. There is a clear decline in opportunity entrepreneurship and an increase in necessity entrepreneurship. In all rural and mixed-rural counties, college education positively predicts opportunity entrepreneurship, whereas individuals with incomes below $50,000 or working in a part-time job are more likely to engage in entrepreneurship driven by need.

Suggested Citation

  • Figueroa-Armijos María & Dabson Brian & Johnson Thomas G., 2012. "Rural Entrepreneurship in a Time of Recession," Entrepreneurship Research Journal, De Gruyter, vol. 2(1), pages 1-29, January.
  • Handle: RePEc:bpj:erjour:v:2:y:2012:i:1:n:3
    DOI: 10.2202/2157-5665.1044
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    Citations

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    Cited by:

    1. del Olmo-García, Francisco & Domínguez-Fabián, Inmaculada & Crecente-Romero, Fernando Javier & del Val-Núñez, María Teresa, 2023. "Determinant factors for the development of rural entrepreneurship," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    2. Maria Figueroa-Armijos & John P. Berns, 2022. "Vulnerable Populations and Individual Social Responsibility in Prosocial Crowdfunding: Does the Framing Matter for Female and Rural Entrepreneurs?," Journal of Business Ethics, Springer, vol. 177(2), pages 377-394, May.
    3. Lado-Sestayo Rubén & Neira-Gómez Isabel & Chasco-Yrigoyen Coro, 2017. "Entrepreneurship at Regional Level: Temporary and Neighborhood Effects," Entrepreneurship Research Journal, De Gruyter, vol. 7(4), pages 1-12, October.
    4. Belloc, Ignacio, 2022. "Emprendimiento en entornos rurales: Evidencia con la Encuesta Europea sobre Condiciones Laborales [Entrepreneurship in rural settings: Evidence from the European Working Conditions Survey]," MPRA Paper 111591, University Library of Munich, Germany.
    5. Sergei Polbitsyn, 2019. "Russia’s Rural Entrepreneurial Ecosystems," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 298-308.
    6. Jiafeng Gu, 2024. "Family social capital and entrepreneurship in rural China: potential mediating mechanisms," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-30, August.
    7. Minghao Li & Stephan J. Goetz & Mark Partridge & David A. Fleming, 2016. "Location determinants of high-growth firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(1-2), pages 97-125, January.
    8. Pamela Queen, 2015. "Enlightened Shareholder Maximization: Is this Strategy Achievable?," Journal of Business Ethics, Springer, vol. 127(3), pages 683-694, March.
    9. Zafeirios Thomakis & Irene Daskalopoulou, 2022. "Entrepreneurial Views and Rural Entrepreneurial Potential: Evidence from Greece," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1611-1634, June.

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