GROWTH OF RURAL US NON-FARM PROPRIETORS WITH A FOCUS ON AMENITIES

Abstract

In this research we explore how local amenities relate to proprietorship growth by merging two lines of work: amenities and rural growth and the drivers of proprietorship and small business growth. We do so to examine what role, if any, different types of amenties play in promoting the growth of small businesses in rural USA. Using data for rural US counties we explore the role of natural and built amenities in the growth of rural non-farm proprietorships between 2000 and 2008 by employing a spatial Durbin model to account for both spatial dependency in the data and to explicitly model spatial spillover effects. The results offer evidence that proprietorship growth is spatially clustered, spatial spillover effects matter, and proprietorship growth is higher in those areas with particular climate attributes. That is, the effect of climate on quality of life may be enough to attract individuals who wish to start new firms.