Exploring the Determinants of the Relationships between the Land-Based Sectors with the Wider Rural Business Base in Scotland: An Empirical Analysis

Abstract

Over the past two decades, the relative socio-economic importance of land-based sectors has declined in comparison to non-land-based businesses such as tourism, food and beverage activities. However, policy implementation and research have primarily focused on the economic contributions of land-based businesses, leaving businesses outside these sectors and in rural areas, referred to as non-land-based businesses, largely overlooked. Therefore, this study aims to examine the importance of non-land-based businesses and the key determinants of the relationships between non-land-based businesses and land-based (farming, forestry and landed estate) sectors in rural Scotland. Through a survey of 1500 businesses whose primary focus is not agriculture, forestry or landed rural estates in four Scottish regions, the key findings of the logit model reveal that businesses located in rural areas are more likely to have relationships, both direct (supplying or purchasing goods/services) and indirect, with farming, forestry and landed estate sectors than their urban counterparts. Focusing on rural businesses, the results show that business size, sectors, business age, exporting, importing and business constraints related to cash flow, digital connectivity and government financial support significantly influence their relationships with land-based sectors. The results of crosstab analysis also reveal differences in business performance, business challenges related to Brexit and future plans between non-land-based rural businesses having relationships with land-based sectors in different rural classifications: accessible/remote small towns, accessible rural areas and remote rural areas. The paper concludes with policy recommendations to support rural businesses and future land-based and non-land-based sectors in rural Scotland.