Page 79 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

68 Norman Walzer, Adee Athiyaman, and Gisele F. Hamm

2002; Florida 2002; IIC 2006). Thus, we included two natural amenities
variables to capture the scenic factor in counties. The theory is that entre-
preneurs or those interested in starting businesses will be lured to these ar-
eas. The measures are composites of objective indicators such as: (1) warm
winter, (2) winter sun, (3) temperate summer, (4) low summer humidity,
(5) topographic variation, and (6) water area.

BUSINESS STRUCTURE

Microbusinesses are often linked to larger businesses and, in some
instances, are offshoots of these organizations, so business structure in a
county can affect or determine prosperity. Note that this approach supports
arguments in the endogenous growth theory that the concepts of diversity
and selection determine entrepreneurship. Thus, three measures of business
structure are included in subsequent analyses.

Business Density
The density of businesses not only signifies markets available but also in-
dicates opportunities for microbusiness owners to interact and share
knowledge and/or expertise. The number of microenterprises per 10,000
residents is included to reflect business structure in a county.

Rural-Urban Continuum Codes (RUCC)
Proximity to population (markets) and businesses is important to most
enterprises serving a local or regional market but especially to microenter-
prises with limited marketing budgets. The Rural-Urban Continuum Codes
(RUCC), also known as Beale Codes, are included to capture proximity to
metro areas (Butler and Beale 1994).

Growth in Larger Businesses
As noted previously, a limitation of the microenterprise data is that busi-
nesses can expand and grow into the next larger size category. To adjust for
these experiences, the growth rate of enterprises with between 5 and 15 em-
ployees is included in the business structure category.

POTENTIAL ENTREPRENEURSHIP FACTORS

Papadaki and Chami (2002) argue that specific population subgroups in
rural areas more often engage in entrepreneurship. Three groups—(1) agri-