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Business survival rates across the urban–rural divide

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  • Steven C. Deller
  • Tessa Conroy

Abstract

Scholars and practitioners have concluded that entrepreneurship and small business development is central to community economic development. Often times community members, including elected officials, are skeptical of the importance of new and small firms due to their seemingly high failure rate. In this study we use the National Establishment Time Series (NETS) database of US establishments survival rate of new firms in each US county. For each county, we identify the number of new firms born in each year and calculate their survival rate as the share of firms from each cohort still operating five years later. We then explore how survival rates change over a simple urban–rural spectrum from 1990 to 2007. As expected, survival rates vary significantly by birth year, and new businesses in rural communities tend to have higher survival rates than those in urban communities. We close the study with a discussion of specific policy options.

Suggested Citation

  • Steven C. Deller & Tessa Conroy, 2017. "Business survival rates across the urban–rural divide," Community Development, Taylor & Francis Journals, vol. 48(1), pages 67-85, January.
    • Handle: RePEc:taf:comdev:v:48:y:2017:i:1:p:67-85
    DOI: 10.1080/15575330.2016.1246459
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    Cited by:

    1. Evangelos Rasvanis & Vassilis Tselios, 2023. "Do geography and institutions affect entrepreneurs’ future business plans? Insights from Greece," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-21, December.
    2. Zhou, Nan & Sun, Ruohan, 2024. "Coping with the storm: The role of fintech in SME survival," International Review of Financial Analysis, Elsevier, vol. 93(C).
    3. Mukhamad Najib & Abdul Aziz Abdul Rahman & Farah Fahma, 2021. "Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation," Sustainability, MDPI, vol. 13(19), pages 1-16, September.
    4. Andrew J. Van Leuven & Sarah A. Low & Edward (Ned) Hill, 2023. "What side of town? How proximity to critical survival factors affects rural business longevity," Growth and Change, Wiley Blackwell, vol. 54(2), pages 352-385, June.
    5. Tessa Conroy & Steven Deller, 2023. "I will survive…but at what (opportunity) cost?: A spatial analysis of business survival and Jacobian externalities," Growth and Change, Wiley Blackwell, vol. 54(2), pages 550-571, June.
    6. Cuéllar-Fernández, Beatriz & Fuertes-Callén, Yolanda & Serrano-Magdalena, Adriana, 2024. "Factors behind the resilience of rural startups," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    7. Woraphon Yamaka & Paravee Maneejuk & Rungrapee Phadkantha & Wiranya Puntoon & Payap Tarkhamtham & Tatcha Sudtasan, 2023. "Survival and Duration Analysis of MSMEs in Chiang Mai, Thailand: Evidence from the Post-COVID-19 Recovery," Mathematics, MDPI, vol. 11(4), pages 1-21, February.
    8. Yuxuan Pan & Tessa Conroy & Alexandra Tsvetkova & Matthew Kures, 2020. "Incentives and Firm Migration: An Interstate Comparison Approach," Economic Development Quarterly, , vol. 34(2), pages 140-153, May.

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