Determinant factors for the development of rural entrepreneurship

Abstract

Promoting rural entrepreneurship provides solutions for depopulation and economic development. This paper studies the phenomenon of rural entrepreneurial activity in Spain, where the depopulation of territories has become a serious problem.Using regional panel data for the period 2007–2018, the study examines whether factors such as the unemployment rate, GDP per capita, economic growth, bank credit, road infrastructure, R&D investment and the level of human capital are related to the propensity to undertake entrepreneurship in the rural environment.On the one hand, rural entrepreneurship is based on market opportunities, not conditioned by the level of regional unemployment. On the other hand, rural entrepreneurs find greater opportunities for entrepreneurship when they are in an environment characterised by investment in R&D and available credit. However, professionals with a higher level of education find the rural environment less attractive for entrepreneurship than do professionals with secondary education.This work enriches our knowledge of the factors that encourage rural entrepreneurship in Spain and invites public authorities to reflect on the economic policies of employment, education, innovation and the promotion of financing that revitalise the rural environment.