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Reciprocated Community Support and Small Town-Small Business Success

  • 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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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
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Publication status: Published in Entrepreneurship and Regional Development, August 1999, vol. 11, pp. 231-246
Handle: RePEc:isu:genres:1643
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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