Innovative Behaviour of Rural Small Enterprises

Purpose – In this paper, the authors set out to establish if there is a link between finance and economic growth in rural areas. The purpose of this paper is to evaluate the relation between credit by major lenders in rural areas – commercial banks and Farm Credit System (FCS) institutions – and economic growth for the period 1991-2010. Design/methodology/approach – The motivation for this work comes from empirical studies showing a link between economic development and financial system development as well as from work which highlights the positive role of long-term finance provided by banks. The authors use two alternative panel data sets and fixed effects models to estimate the causal effect of credit supply (with lagged explanatory variables) on agricultural GDP growth per rural resident. Findings – The authors find a positive association between agricultural lending and agricultural GDP growth per rural resident with additional billion in loans (about a third of the actual average) associated with 7-10 percent higher state growth rate with this association stronger during the 1990s. Regional data confirm these results. The results point to a positive link between credit and economic growth in rural areas during that period, attributable to the lending by FCS institutions and by commercial banks. Research limitations/implications – Data availability limits the scope of this paper. The authors use state level balance sheet data available for the 1991-2003 period and annual data for 2003-2010 period. An additional regional data set is constructed for 1991-2010 with more aggregated data for the ten USDA agricultural production regions. The small number of panels limits the ability to use more sophisticated econometric models and the choice of dependent variables that captures economic growth. Practical implications – By provides evidence that agricultural finance and in particular lending contribute significantly to the growth of US agriculture, this paper contributes to the policy debate on weather support for agricultural finance initiatives is justified. Originality/value – The authors are not aware of another study that has linked agricultural lending by commercial banks and FCS institutions to growth in rural areas in the USA.

To address persistent poverty in rural communities, the Government of Belize and the European Union (EU) are investing €7.2 million in the Belize Rural Development Program (BRDP) under the 9th European Development Fund (EDF). The objective is sustainable economic growth of rural areas, in terms of more efficient and competitive small and micro enterprises, improving basic services for rural population, and strengthening the policy and institutional environment. BRDP is guided by a multi-institutional Steering Committee at the national level, and supported by a multi-sectoral Development Committee at the district level. BRDP’s methodology is bottoms-up, participatory, and enterprise focused. The EDF resources are granted via micro grants (< € 500), small grants (< € 10,000), and large grants (€ 0.2 million to 1.3 million). Investments are demand driven and combine infrastructure, capacity building, equipment, technological resources and training. Beneficiaries must contribute at least 25% of the total investment. When it ends in early 2010, BRDP will have invested with at least 2,500 poor families in some 111 villages and invested in small and large infrastructures such as 30 internet cafes, 4 training centers, irrigation and processing facilities, a farmers market, a village water system, 57 homes for poor families, 10 hurricane shelters improved, a rebuilt bridge on a main highway, and an upgraded 9 mile rural road. In the process, some 19 institutions, public and NGOs, will be in a better position to participate in BRDP 2 which is planned to start in mid 2010.

In the modern conditions of globalization and economic development, the management of investments in agricultural production has become an important issue in the development of China's national economy. Understanding the relevant concepts of agricultural investment, analyzing its environment, building a scientific and sound structure, determining the proper scale and implementing an effective agrarian economic investment strategy scheme are very important to promote the modernization of agricultural production processes, increase the productivity of agriculture as a sector of social production in which people use the natural conditions of the environment, rely on the physiological functions of animals, plants and microorganisms, and strengthen and control the life of organisms through labor to obtain the material products needed society and farmers' incomes. Research and improvement of the theory of management of agricultural investments can help in making management decisions, increase the efficiency of commodity producers and strengthen the stability of rural areas. This article examines in detail the theoretical foundations and practical application of agricultural investment management, with the aim of providing useful recommendations and reference materials for decision-makers in the agricultural sector by defining basic concepts, analyzing the foundations of theory and research methods. Thus, relevant concepts and main problems of agricultural investment management and theories of economic growth of rural areas by investing in the agricultural sphere were presented. Various views of the classical theory of economic growth and development of rural areas were collected; the main obstacles to the development of agricultural investment are identified, including state macro-control at various stages of regional development.

Energy is the basis of the country’s economic development. China is a major supplier and consumer of energy, with a continuous increase in energy demand, which leads to deficiencies in its stable supply and serious problems such as import dependence, which seriously affects the country’s energy security. The countries of the “Belt and Road” have sufficient energy resources, which creates the potential for expanding energy cooperation with China. It is very important to build a community of shared energy circle with countries along the Belt and Road, build a diversified energy strategic system, and expand the chain of energy production and transformation to promote energy cooperation between China and countries along the Belt and Road. In today’s conditions of globalization and economic development, the management of energy development has become an important issue for the development of China’s national economy. Understanding the relevant research concepts and improving the theory of energy development management can help in making management decisions, increase the efficiency of commodity producers and strengthen the sustainability of Chinese territories. This article explores the theoretical foundations and practical applications of energy development management in detail, with the aim of providing useful guidance and reference materials for energy investment decision-makers by identifying key concepts, analyzing theoretical foundations and research methods. Thus, relevant concepts and main problems of energy investment management and theories of economic growth of rural areas by investing in the energy sector were presented. Various views of the classical theory of economic growth and development of rural areas were collected; the main obstacles to the development of energy investment are identified, including state macrocontrol at various stages of regional development.

Integrating Fourth Industrial Revolution (4IR) technologies in microgrid development offers significant potential to drive sustainable economic growth in rural areas of Nigeria. This paper explores how advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), and blockchain can be leveraged to enhance the efficiency, reliability, and scalability of microgrids, which are critical for providing reliable electricity in underserved regions. The integration of 4IR technologies can optimize energy generation and distribution, enabling real-time monitoring, predictive maintenance, and decentralized energy management. These innovations not only improve the operational efficiency of microgrids but also facilitate the creation of new economic opportunities by powering local industries, supporting agricultural productivity, and enabling digital services in rural areas. Furthermore, the deployment of 4IR-enhanced microgrids can significantly reduce the carbon footprint of energy systems in rural communities by promoting the use of renewable energy sources. This contributes to Nigeria's broader sustainability goals and aligns with global efforts to combat climate change. The study also examines the socio-economic impacts of microgrid development, including job creation, improved quality of life, and the empowerment of local communities through increased access to electricity. The findings suggest that integrating 4IR technologies in microgrid development can play a pivotal role in addressing energy poverty, fostering economic resilience, and promoting inclusive growth in rural Nigeria. This research underscores the need for supportive policies, investment in technological infrastructure, and capacity-building initiatives to fully realize the potential of 4IR technologies in transforming rural energy systems. The implications for sustainable economic growth are profound, offering a pathway for rural areas to leapfrog into a more prosperous and sustainable future.

This paper examines the role of advanced biofuels in promoting energy access and economic growth in rural areas, with a focus on developing countries. Advanced biofuels, produced from non-food biomass sources such as agricultural residues, algae, and waste, have the potential to reduce rural energy poverty while creating economic opportunities. Through case studies of successful initiatives in countries like India and Brazil, this study highlights how decentralized biofuel production has improved energy access, created local employment, and enhanced agricultural value chains. Notable findings include the establishment of community-led biofuel plants that reduced reliance on imported fossil fuels and generated sustainable incomes for farmers by utilizing crop residues. The study also identifies key challenges such as limited infrastructure, access to financing, and policy support, while offering actionable recommendations to scale advanced biofuel adoption. Overall, advanced biofuels present a promising pathway to sustainable rural development by enhancing energy security, reducing environmental impact, and fostering economic growth.

Publisher Summary This chapter discusses the financial development and economic growth in underdeveloped countries. An observed characteristic of the process of economic development over time, in a market-oriented economy using the price mechanism to allocate resources, is an increase in the number and variety of financial institutions and a substantial rise in the proportion not only of money but also of the total of all financial assets relative to GNP and to tangible wealth. Typical statements indicate that the financial system somehow accommodates—or, to the extent that it malfunctions, it restricts—growth of real per capita output. Such an approach places emphasis on the demand side for financial services; as the economy grows it generates additional and new demands for these services, which bring about a supply response in the growth of the financial system. In this view, the lack of financial institutions in underdeveloped countries is simply an indication of the lack of demand for their services.

In today's society, rural areas face challenges such as complex terrain and uneven population distribution, and infrastructure construction is exceptionally difficult. At the same time, poor information transmission and low communication efficiency have also become a major obstacle to the promotion of the digital economy in rural areas. This study aims to use gradient advancement models to identify potential risks in the growth of the digital economy sector related to rural revitalization. In this study, we used an enhanced hierarchical gradient boosting algorithm. The research results indicate that the introduction of this technology can provide us with a more comprehensive and reliable risk prediction model, thereby more scientifically assisting the development and decision-making of the digital economy in rural areas. This article provides a new perspective and solutions for development issues in rural areas, promoting sustainable development and economic growth in rural areas.

Economic growth in rural areas relies on managing natural and economic resources, emphasizing local wisdom. Village-owned Enterprises (BUMDes) is crucial in mobilizing local potential and improving infrastructure to support micro, small, and medium enterprises (MSMEs). In Puger Kulon Village, known for its fisheries and unique MSME products like shrimp paste and handicrafts, the lack of digital marketing limits economic growth. This community service aims to empower local MSMEs through E-CoDigimark, a digital platform that enchances product promotion and accessibility. Activities included socialization, training in website management, and digital marketing workshops. MSME actors learned to utilize social media, marketplaces, and E-CoDigimark to market their products effectively. Mentoring sessions prepared local admins to manage the platform sustainably. As a result, local businesses gained better visibility, and MSMEs improved their skills in creating engaging content, managing online stores, and connecting with broader markets. The program significantly impacted local economic empowerment, improving product competitiveness and digital marketing capabilities. With E-CoDigimark, Puger Kulon’s products now reach national and global markets, fostering sustainable economic development and establishing the village as a center of tourism and local enterprise.

The agrifood industry contributes to sustaining the population and the economic growth in rural areas of Spain. Innovation in the agrifood sector has therefore become a necessity as a means of improving the competitiveness of companies and the territory, thus promoting sustainable rural development in areas currently characterised by social issues such as depopulation. Meeting this need requires the generation of specific knowledge on innovation in the rural agrifood industry to strategically steer the business management of innovation. This study aims to contribute to further improving the competitiveness of the agrifood industry through the interrelation of critical innovation factors in small and medium-sized agrifood enterprises, thus shedding light on the innovation environment of differentiated local products in depopulated rural regions. The qualitative Interpretive Structural Modelling (ISM) methodology was used with the participation of entrepreneurs and experts from the sector. The ISM was applied to a case study in Alcarria Conquense, a Spanish region that embodies the current problems of many rural territories. The results show four factors (cooperation, managerial skills, absorptive capacity, and market orientation) are binding variables with a high power of influence and dependence, and a fifth factor, funding, is the most dependent on the others. The work contributes to the literature by revealing the needs and opportunities for a potential strategic planning of rural development that can positively influence the problems of the region through innovation management in this industry.

This paper seeks to analyze the impact of agricultural investments on economic growth in rural communities in Ro-mania. It answers the question: are the investments in agriculture a determinant of economic growth in rural communities , and if yes, what is their impact on economic growth? the objectives are to identify, through linear regression models, the intensity and meaning of the relationships between the value of investments and the main indicators that can express economic growth in rural areas. In this purpose, the level of relationships between the value of investments in agriculture and the value of GDP in predominantly rural areas, the value of GDP in agriculture and the value of the agricultural production are analyzed. The main results show that the variables chosen are influenced by the value of the investments in different proportions, so the hypothesis that investment in agriculture has a positive and medium impact on rural economic growth is true. The most significant relationship is obtained between the value of agricultural investments and the value of agricultural production.

Subject. The article discusses key indicators of the economic growth potential of rural areas with respect to the specifics of the international approach. Objectives. We study approaches to determining the concept of economic growth and key concepts of rural area development, which prevail in modern economics. The study also analyzes the applicable sets of indicators contributing to the effective evaluation and stimulation of the economic growth potential of rural areas. Methods. The study is based on the analysis of the existing theories of the economic growth in rural areas. We systematized economic knowledge and practices of determining economic growth indicators. Results. We analyzed basic difficulties in determining key economic growth drivers in rural areas, and identified aspects that influence the sustainable development and transformation of rural areas, referring to the use of innovative development concepts and their competitive advantages. The article sorts out key groups of various social metrics of the economic growth potential, and shows various combinations of socio-economic development indicators of rural areas. Conclusions and Relevance. The economic growth of rural areas depends in opportunities and drivers of effective strategic development, for which the growth potential should be adequately assessed and implemented. Evaluating the economic growth potential and development of rural areas, it is possible to set up crucial goals for raising the efficiency and competitiveness, such as the development of modern agricultural production, the establishment of the balanced administrative system and the creation of reasons for the State, business and people to follow common interests in order to improve the quality of rural life.

This study aims to determine the leading sector or basis sector to be prioritized in developing the center of economic growth in rural areas of Lombok Barat Regency, Nusa Tenggara Barat Province. The method used is Location Quotient (LQ). The analysis result shows that the leading sector in Lombok Barat Regency, where the LQ value is greater than 1 for the period of 2010-2013 were electricity, gas and clean water, construction and services sector, while the others including to non-base sector. During 2010 to 2013 the basis sector in Lombok Barat Regency has changed slightly each year. This is indicated by the decline in productivity in the manufacturing sector in 2012 to 2013, so the sector is no longer become a basis sector in Lombok Barat Regency. However, for the long term, the center of rural economic growth is not only based on one basis sector alone because of the dynamics of development that causes the change. Recently, the Lombok Barat Government prioritizes the tourism sector, so that it can be a leading sector even not becoming a basis in establishing a center of rural economic growth. Refer to the results of the study, we propose the Government of Lombok Regency to prioritize electricity, gas and clean water in developing center of economic growth.

This paper analyses the impact of environmental regulations on economic growth. We investigate the role of technological innovations measured in terms of total patent activity on the relationship between environmental regulations and economic growth. The total environmental tax revenue as a proportion of GDP is used to measure environmental regulations, which reflects the stringency of environmental policies in a given country. This study utilized a panel data set across 83 countries for the period 2002-2022 and applied a two-step System Generalized Method of Moments (GMM) estimator to examine endogeneity, growth persistence, and unobserved heterogeneity, and to assess the direct and interactive impacts of environmental regulations and patent activity on economic growth. The empirical findings indicate that the advancement of technological innovations enhances the efficacy of environmental regulations to stimulate economic growth however the positive effect of technological innovations on environmental regulations-growth relationship diminishes and even becomes negative after a certain threshold level of technological innovations is reached. In other words, it is found that environmental regulations can spur growth in low-innovation economies, but reduces economic growth in highly innovative ones by crowding out research and development, increasing costs, or introducing transitional inefficiencies. The findings emphasize the significance of matching the policies on the environment and innovations to make sure that the innovations that are brought by regulations are capable of supporting sustainable economic growth.

Based on the theory of endogenous economic growth model, this paper is an empirical analysis of the financial development from 1985 to 2009 and of the economic growth in rural areas. The empirical results show that Sichuan Rural Finance Development and Rural Economic growth is positively correlated, that is, if the development of rural finance is in good condition, it can effectively promote the faster development of the rural economy; If not, it will restrict the rural economic growth. Finally, strategies and recommendations are made for the encountered problems in the development of rural economy and finance of Sichuan.