Page 76 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

Entrepreneurship and Small Business Growth 65

1. Prosperous economic conditions have a direct positive influence on
business structure.
2. The link between natural amenities in the county and potential entrepre-
neurship suggests natural amenities are positively related to potential
entrepreneurship.
3. The direct positive influence of economic conditions on business
structure means that enhancements or improvements in business
structure result in increases in microbusinesses.
4. County business structure results in significant increases in potential
for entrepreneurship in a region.
5. The direct positive influence of natural amenities on entrepreneurship
potential in the region suggests that increases in amenities bring in-
creases in microbusinesses.

The measures associated with the conceptual framework are defined in
table 4.1 and their relevance to the analyses described in subsequent
pages.

ECONOMIC CONDITIONS

Six measures describe economic conditions in a county and where possible,
the relevance of each measure to the study of entrepreneurship is high-
lighted.

Unemployment Rate

Residents in counties with higher unemployment are pressured to seek
alternative employment opportunities and, in some cases, may start a busi-
ness. Likewise, small counties that have lost manufacturing or another large
industry are expected to have a higher proportion of their nonfarm em-
ployment in small businesses. Information on the average age of unem-
ployed is not readily available however. Age of residents can also play an
important role in business formation when older displaced workers have
wealth to invest in a business venture.

Poverty Rate

Median family income and per capita income are proxies for wealth. Per-
centage in poverty has been used in other studies and is included here, ar-
guing that relatively high percentages of residents in poverty are unlikely to
have access to wealth and conventional loans.