Secretariat

Anja Herkner
Institute of Rural Studies

Bundesallee 64
38116 Braunschweig
Phone: +49 531 596 5501
Fax: +49 531 596 5599
lr@thuenen.de


Business start-ups in rural areas

Project

Start-up idea and start-up growth (c) lovelyday12 - stock.adobe.com
The project investigates the causes and effects of business start-ups in rural areas. (© lovelyday12 - stock.adobe.com)

Regions with high start-up activities tend to be seen as dynamic and competitive. If, on the other hand, the number of new start-ups is low, regions are quickly regarded as structurally weak, especially rural regions. Instead of such simplistic conclusions, however, differentiated analyses are required in order to correctly interpret the patterns and importance of regional start-up activities.

Background and Objective

Start-up rates sometimes vary considerably, both between countries and between regions. The reasons for this are manifold. The spatially uneven distribution of individuals with entrepreneurial skills plays just as much a role as, for instance, differences in the quality of network relationships or as regards regional and national framework conditions.

Likewise, the economic effects of business start-ups are complex and not always clear. An important determinant is, for example, the nature and degree of competition. While within an effective quality competition start-ups can serve as important drivers of economic development, this is not necessarily the case within a cost-driven predatory competition. Moreover, not every type of business start-up generates benefits for the national or regional economy. This applies in particular to start-ups founded out of necessity, which are set up for lack of suitable employment alternatives and whose growth ambitions are often below-average.

The goal of this project is to identify and to assess central determinants and economic effects of business start-ups within different spatial contexts with special focus on rural areas. The theoretical and empirical findings will then serve as a basis for guidelines for a start-up-friendly economic policy.

Approach

In a first step, we employ suitable databases to describe the development of regional and national start-up activities over time. This is followed by a theory-based empirical examination of the underlying determinants. Subsequently, the most important factors from the individual, regional, and national level as well as the interactions between them will be collated and analyzed in detail.

The next step is to scrutinize the impact of business start-ups on their regional economies. In particular, we will examine whether there are distinctive spatial patterns in terms of determinants and economic effects that distinguish rural from non-rural areas and thus might require differentiated economic policy strategies.

The empirical design of the project includes in particular quantitative methods. Depending on the respective research question, time series and/or multi-level analyses as well as spatial econometric methods will be applied. Throughout this process, literature analyses and potential case studies will accompany, complement and deepen the quantitative findings.    

Our Research Questions

  • How do start-up activities at national and regional level develop over time?
  • Which determinants influence the quantity and quality of start-up activities, and how do these determinants interact?
  • What relation is there between start-up activities and economic development?
  • Which differences exist between non-rural and rural areas, and how can they be explained?
  • Which guidelines should a start-up-friendly economic policy adopt?

Thünen-Contact


Duration

6.2018 - 5.2022

More Information

Projekt type:
Project status: ongoing

Publications at Thünen Institute to the project

hits: 1

  1. Bergmann H, Geissler M, Hundt C, Grave B (2018) The climate for entrepreneurship at higher education institutions. Res Policy 47(4):700-716, DOI:10.1016/j.respol.2018.01.018

Further publications to the project

hits: 4

  1. Hundt C, Sternberg R (2016) Explaining new firm creation in Europe from a spatial and time perspective: A multilevel analysis based upon data of individuals, regions and countries. Papers Reg Sci 95(2):223-258, DOI:10.1111/pirs.12133
  2. Bergmann H, Hundt C, Sternberg R (2016) What makes student entrepreneurs? On the relevance (and irrelevance) of the university and the regional context for student start-ups. Small Bus Econ 47(1):53-76, DOI:10.1007/s11187-016-9700-6
  3. Hundt C, Sternberg R (2014) How did the economic crisis influence new firm creation? : a multilevel approach based upon data from German regions. Jahrbücher Nationalökon Statist 234(6):722-756, DOI:10.1515/jbnst-2014-0605
  4. Hundt C (2012) Zur Erklärung von Gründungsaktivitäten : Eine Mehrebenenanalyse aus individueller, regionaler und nationaler Perspektive. Münster; Hamburg: LIT Verl, V, 308 p, Hannover, Univ, Diss, 2012, Wirtschaftsgeogr 54