Doing well and doing good? Small rural businesses’ performance and responsibility towards local communities

Abstract

Small businesses play a significant role in the vitality of rural communities. Due to the locally embedded nature of many small rural businesses, owner-managers consider taking care of the well-being and success of the local community as an important business responsibility. We examine whether responsibility towards the local community is also reflected in the positive business performance of small rural businesses. Our study is based on a survey with 258 small rural businesses. The results show that exceptional financial (objective or subjective) business performance is neither a prerequisite nor a direct result of local-level responsible business behavior. Instead, the results demonstrate a positive association between small businesses' perceptions of support and community's appreciation for the businesses and businesses' responsibility towards the community. We thus contribute to the discussion on small business social responsibilities by highlighting the role of reciprocity in the relationships between businesses and local communities.