De Gruyter Handbook of Rural Entrepreneurship

Currently, there is limited theoretical framework or body of literature that defines the domain of rural entrepreneurship (Pato and Teixeira, 2014). Some theoretical frameworks exist in discussing general entrepreneurship, and many scholars have discussed the relationships between entrepreneurial decision making, innovation, desire to take control, and seeking higher values through change. However, the concepts of general entrepreneurship might not accurately and fully represent or explain the behaviors, decisions, choices, and social networks of rural entrepreneurs. The most recent review of rural entrepreneurship literature indicates that the prominent scholars of rural entrepreneurship research were from Europe. Most of the existing literature focuses on developed countries, and there are only limited empirical studies examining rural entrepreneurship associated with undeveloped or underdeveloped countries.

Rural economic development and rural entrepreneurship have largely been explored through interdisciplinary research. Economists, sociologists, geographers, and historians have recognized issues in rural communities – a declining labor force and wages, decreasing social and economic capital, reduced investment in education and professional development, and a lack of catalytic industries or public policies to stimulate growth and wealth creation (e.g., Gladwin, et al. 1989). Interestingly, many scholars applaud the efforts of small businesses to revitalize rural prosperity and economic mobility. Rural small businesses also seem to be more resilient during economic shocks. Some of the most popular topics in rural entrepreneurship research relate to identifying key factors associated with entrepreneurial actions in rural areas, examining barriers and challenges imposed by institutions, analyzing gaps and opportunities related to infrastructure, and socio-demographic variables correlated to the likelihood of new venture creation in rural communities. For example, Kolawole and Torimiro (2005) applied factor analysis to identify key variables influencing rural entrepreneurship development and employment promotion. This study examined selected socio-economic variables such as work experiences and education. They also studied institutional and infrastructural situations as enhancers or barriers, other constraints and challenges, and ways to encourage rural entrepreneurship among local residents. The conclusions suggested that a lack of accredited facilities and the high cost of labor are major constraints, and other influential factors included social status, personal experience, infrastructure functionality, and educational advantage. Yu and Artz (2019) investigated entrepreneurship and location choices among college-educated individuals in the US. These researchers modeled the location and entrepreneurship decisions jointly, demonstrating that individuals who chose a rural residence were more likely to become entrepreneurs. Sharma, et al. (2013) presented similar findings that entrepreneurship was more likely to exist in economically distressed regions; although, rural entrepreneurs encountered more challenges surrounding access to knowledge, financing, technology, human resources, and management and marketing expertise.

Harpa (2017) analyzed four factors influencing rural entrepreneurship from a macroeconomic perspective – educational institutions, clusters and associates, innovation support institutions, and state institutions. Determinants included policies, competence, skills, motivation, culture, natural resources, human resources, location, infrastructure, technology, suppliers, competitors, local networks, markets, etc. Soleymani, et al. (2021) examined sustainable rural entrepreneurship for development, growth and prosperity. Several sets of indicators were identified related to social, economic, and ethical domains in supporting rural entrepreneurship. Social trust, social altruism, and empathy significantly influenced rural entrepreneurs’ network capacity. Rural enterprise development positively related to effectiveness of utilization of facilities, cost management, and services to business stability and market management. Finally, sustainable rural entrepreneurship development was positively linked to ethical practices such as financial business transparency, ethics in using biological resources, and ethics in managing human resources.

Many scholars have offered insight to create rural entrepreneurship theory that would link to knowledge creation and wealth creation in rural communities. Newbery, et al. (2017) discussed gaps and facilitated beneficial flows of knowledge linking to the importance of networks, communities, and the supply chain. Authors in sociology, regional economic development, and political science have discussed the role of policies, regional development strategies, and learning experiences that could hinder or strengthen rural entrepreneurship (Goetz, et al. 2010; Koyana and Mason, 2017). Many studies have explored how gender, age, and experiences trigger rural entrepreneurship, more specifically, empowering women and youth to create new opportunities. Younger and older migrants tended to have the largest impacts on rural business start-up. Older, retired people, who preferred a rural life-style, were more likely to emerge as entrepreneurs (Deller, et al. 2019).

Researchers seem to agree that there are significant differences between rural entrepreneurship and general entrepreneurship – how entrepreneurs think, act, and interact with others while facing various influential social, economic, political, and environmental forces. Our objectives are important and timely because of the growing interests of studying rural entrepreneurship at local, regional, national, and global levels. Given recent multiple shocks in our society and economy, rural entrepreneurship deserves a broader and deeper investigation through an interdisciplinary view to generate new ideas, theories, and best practices.

Chyi-Lyi (Kathleen) Liang, North Carolina Agricultural and Technical State Univ, USA; Thomas S. Lyons, Univ of Tennessee, USA