Page 104 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

The Drivers of Regional Entrepreneurship in Rural and Metro Areas 93

cepted measure of topography, indicating the ruggedness and altitude of the
regional terrain.
Natural amenities have a strong relationship to both entrepreneurial
breadth and depth. Regions with more topographical variation appear to be
places of high self-employment. This finding may result from people wanting
to live a certain lifestyle in scenic, mountainous locations; self-employment
may provide the best opportunities for them to live that lifestyle. While en-
trepreneurs may be drawn to high amenity regions for lifestyle opportuni-
ties, they have been able to create businesses that produce high value-added
for their communities.

Financial Capital
Access to financial capital is widely seen as a critical factor in developing
a region’s entrepreneurship potential (Barkley 2003). Entrepreneurs in ru-
ral areas are often at a particular disadvantage in gaining such access as their
small size and often novel ideas do not mesh well with established infor-
mation gathering and loan scoring systems. Yet substantial local pools of
available capital can be invaluable in generating a self-reinforcing cycle of
entrepreneurial lending. Recent research indicates that extensive regional
asset ownership has a significant and positive effect on firm formation rates
(Garofoli 1994; Sutaria and Hicks 2004). Therefore, the regressions use a
county’s average bank deposits per capita to approximate the pool of local
assets potentially available for lending.
Access to financial capital also appears essential to regional entrepreneurial
success. Average bank deposits per capita are positively associated with the
value-added entrepreneurial depth metric. Bank deposits and high value en-
trepreneurship simultaneously contribute to each other. Bank deposits allow
entrepreneurs to grow, who can in turn generate higher local bank deposits.

Infrastructure

Regional infrastructure, such as roads and telecommunications, allows
entrepreneurs to access resources and markets more easily. These factors are
likely to be especially important for entrepreneurs who are further away
from key markets and suppliers. In terms of roads, interstate highways are
perhaps the best indicator of the connectedness of the region to the nation’s
car- and truck-oriented commerce network. The existence of an interstate in
a county is likely to promote high value entrepreneurship. The role of the
Internet in business transactions has now also become a necessary condi-
tion for success, so access to broadband Internet access is likely to positively
influence entrepreneurship as well. Broadband access may be especially im-
portant in allowing entrepreneurial income and value to flourish.