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Building the rural economy with high-growth entrepreneurs

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  • Jason Henderson

Abstract

Entrepreneurs create economic growth in their communities by forming new firms. Each year during the past decade, more than half a million businesses were started that added new jobs in the United States. In the 1990s, during the longest economic expansion in the United States economy, the majority of new jobs were created by small and medium-sized entrepreneurs operating high-growth businesses.> Because entrepreneurs are such a wellspring of growth in the economy, many rural policymakers have shifted their long-time focus of recruiting existing firms, such as branch plants, to developing new entrepreneurs. New policies generally support a wide range of entrepreneurs. However, policies often fail to recognize that the benefits of entrepreneurs can vary dramatically, depending on the entrepreneur’s desire to build a high-growth business. And rural areas often lack these high-growth entrepreneurs.> Henderson reviews entrepreneurial activity in rural America and discusses some of the new ways policymakers are beginning to encourage high-growth entrepreneurs in their communities. After discussing the benefits entrepreneurs offer communities, he examines the pattern of entrepreneurship in rural areas and the difficulties many rural communities face in supporting high-growth entrepreneurs. Finally, he discusses some of the policies supporting the startup and growth of this valuable resource.

Suggested Citation

  • Jason Henderson, 2002. "Building the rural economy with high-growth entrepreneurs," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 45-70.
  • Handle: RePEc:fip:fedker:y:2002:i:qiii:p:45-70:n:v.87no.3
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    References listed on IDEAS

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    1. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    2. Edward J. Malecki, 2001. "Going digital in rural America," Proceedings – Rural and Agricultural Conferences, Federal Reserve Bank of Kansas City, issue Sep, pages 49-68.
    3. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    4. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    5. Brian Dabson, 2001. "Supporting rural entrepreneurship," Proceedings – Rural and Agricultural Conferences, Federal Reserve Bank of Kansas City, issue Sep, pages 35-47.
    6. Robert L. Formaini, 2001. "The engine of capitalist process: entrepreneurs in economic theory," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q IV, pages 2-11.
    7. Deborah M. Markley, 2001. "Financing the new rural economy," Proceedings – Rural and Agricultural Conferences, Federal Reserve Bank of Kansas City, issue Sep, pages 69-80.
    8. Woo, Carolyn Y. & Cooper, Arnold C. & Dunkelberg, William C., 1991. "The development and interpretation of entrepreneurial typologies," Journal of Business Venturing, Elsevier, vol. 6(2), pages 93-114, March.
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    Keywords

    Rural areas ; Rural development;

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