AUSTIN, Texas — Availability of local banks, a diverse young population, large immigrant communities, and critical health infrastructure such as senior care and child care services predict business creation in rural America, according to a recent study. It was conducted by researchers at the University of Texas at Austin.
Contrary to prevailing policy opinion, each of these variables was more predictive of rural business creation than commonly discussed factors such as broadband availability or patent concentration. These findings show that pro swan This information from researchers at the LBJ School of Public Affairs can inform policymakers and those working to promote entrepreneurship and economic development in rural areas.
The study authors challenge conventional wisdom by emphasizing the importance of specific rather than commonly thought factors in promoting rural entrepreneurship. After controlling for population and number of existing businesses in a county, having a young and diverse population emerged as some of the most important factors predicting local business creation. The study found that both predicted entrepreneurship more than the number of college-educated residents. Wind and oil production were also much more important predictors of rural business creation than solar power.
In particular, we found that the most important predictor of local entrepreneurship was the number of local banks, not the amount of money in banks. Researchers suggest that local banks can provide relationship-based financing to individuals who do not qualify for loans from larger financial institutions.
“Our research focuses on areas that are within the control of policymakers, who have limited influence over population size, but such as protecting small banks and investing in elderly care and childcare. “We can do that,” said Mark C. Hand, one of the study's authors. “Policymakers can also help create communities that welcome immigrants, who have emerged as a strong predictor of local business creation.”
To identify the drivers behind rural entrepreneurship, researchers used machine learning techniques that allow predictions to be made based on existing data. This study analyzes a robust 10-year dataset (2008-2018) of all 254 Texas counties, including 157 rural counties, providing valuable insights for policymakers addressing complex economic challenges. .
“These findings have the potential to guide evidence-based decision-making and targeted interventions aimed at promoting entrepreneurial activity and fostering vibrant rural economies,” study co-authors said. said Vivek Shastri.
Research supported by IC2 A research institute at the University of Texas at Austin has taken an important step toward identifying specific rural counties in Texas with the highest potential for business growth. The researchers plan to expand their methodology for pinpointing these areas and provide further guidance to policymakers in their efforts to promote local business creation.