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Reciprocated Community Support and Small Town-Small Business Success


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  • Kilkenny, Maureen
  • Nalbarte, Laura
  • Besser, Terry


This paper presents an empirical test of the significance of reciprocated community support, in contrast with traditional economic factors and unilateral support, in the success of small businesses in small towns. The central hypothesis is that entrepreneurs who make non-market contributions to their community and whose community supports them, are more likely to consider their businesses to be successful. Logistic regression is used to analyse survey data from over 800 small businesses in 30 small towns of the state of Iowa (USA). The authors found that the interaction effect of an entrepreneur's service to the community, reciprocated by community support of the business, is the single most significant determinant of business success among dozens of indicators and characteristics of the respondent, the business, and the small towns in the sample. In addition, it was found that business people who feel successful expect to expand. These findings are relevant to rural development. The expansion of existing businesses is an important component of regional job growth.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1643.

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Date of creation: 01 Aug 1999
Date of revision:
Publication status: Published in Entrepreneurship and Regional Development, August 1999, vol. 11, pp. 231-246
Handle: RePEc:isu:genres:1643

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Cited by:
  1. Alexander Tatarko, 2012. "Are Individual Value Orientations Related to Socio-Psychological Capital? A Comparative Analysis Data from Three Ethnic Groups in Russia," HSE Working papers WP BRP 03/PSY/2012, National Research University Higher School of Economics.
  2. Anil Rupasingha & Stephan J. Goetz & David Freshwater, 2002. "Social and institutional factors as determinants of economic growth: Evidence from the United States counties," Papers in Regional Science, Springer, vol. 81(2), pages 139-155.
  3. Westlund, Hans & Forsberg, Anette & Höckertin, Chatrine, 2002. "Social capital and local development in Swedish rural districts," ERSA conference papers ersa02p245, European Regional Science Association.
  4. M. Dakhli & D. De Clercq, 2003. "Human Capital, Social Capital and Innovation: A Multi-Country Study," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/211, Ghent University, Faculty of Economics and Business Administration.
  5. Laura Diaconu, 2011. "The Role of Innovation for the Economic Growth and Development of the States. The Case of the Emerging Countries," ERSA conference papers ersa11p391, European Regional Science Association.


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