Rural Economies As Dynamic As Suburban And Urban Areas. Rate Of Business Formation And Closure Shows Small Differences

American rural economies are as dynamic as their
suburban and urban counterparts are, finds a working paper released today by
the Office of Advocacy of the U.S. Small Business Administration. Southern
Regional Advocate Pat Gartland discussed the paper’s findings at a meeting of
the Thomasville, Georgia Chamber of Commerce.

“America has an entrepreneurial culture and entrepreneurs are found in every
setting. The lesson learned here is that rural America’s resilience should not
be underestimated,” said Larry Plummer, assistant professor at Clemson
University and co-author of the paper.

The authors’ central finding is that the differences in the rate of establishment
births and closures between rural, suburban, and urban areas, while
statistically significant, is in fact quite small. That is, general business
dynamics are not a function of geographic area. The authors do suggest that
further research may show that the dynamics of specific industries are shaped
by geography.

While the rate of business births and closures is similar, the absolute
differences in openings and closings remain large. For example, the average
number of annual establishment births per county is 1,128 in urban areas, 182
in suburban areas, and 58 in rural areas.

Written by Larry Plummer and Brian Headd, the paper, Rural and Urban
Establishment Births and Deaths Using the U.S. Census Bureau’s Business
Information Tracking Series,
(http://www.sba.gov/advo/research/rs316tot.pdf) analyzes a set of
establishment birth and death tabulations now available from the U.S. Census
Bureau’s Company Statistics Division.

For more information and a complete copy of the report, visit the Office of
Advocacy website at http://www.sba.gov/advo.

The Office of Advocacy, the “small business watchdog” of the federal
government, examines the role and status of small business in the economy
and independently represents the views of small business to federal agencies,
Congress, and the President. It is the source for small business statistics
presented in user-friendly formats, and it funds research into small business
issues.

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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an
independent voice for small business within the federal government. The
presidentially appointed Chief Counsel for Advocacy advances the views,
concerns, interests of small business before Congress, the White House,
federal agencies, federal courts, and state policy makers. For more
information, visit http://www.sba.gov/advo, or call (202) 205-6533.