Locational Characteristics of Rural Business Establishments as Predictors of Long-Term Economic Resilience


This paper uses longitudinal business establishment data from rural counties in the US Midwest to examine the role of locational assets as determinants of firms’ ability to survive economic shocks. I use a proportional hazards model to estimate the likelihood of survival associated with a business establishment’s proximity to features of the built environment. I find that two specific locational assets—proximity to a central business district and proximity to a limited access highway—are closely associated with a reduced likelihood of failure (going out of business) in the years following the Great Recession. The hazard model was repeated using a series of regression sub-samples, each generated according to establishment size or industry sector. The sub-sample regressions provide a clearer picture of the role played by the built environment as a locational determinant of business survival: smaller establishments benefit from higher survival odds when located in close proximity to a downtown district, while larger businesses—especially those in the manufacturing sector—benefited instead from being located in close proximity to interstate highway ramps.

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Andrew J. Van Leuven
Andrew J. Van Leuven
Assistant Professor of Community and Rural Development