Amenities and new firm formation in rural areas: Fid-Bau Portal

Amenities and new firm formation in rural areas

Naldi, Lucia / Nilsson, Pia / Westlund, Hans / Wixe, Sofia

Abstract Building on the neo-endogenous rural development model and the resource-based view of the firm, this paper investigates the role of place-based amenities for new firm formation. Empirically, we employ a full-population dataset encompassing new firms in Sweden from 2009 to 2016, combined with geocoded datasets with the spatial distribution of nature- and culture-based amenities. The results show that local amenities are indeed important factors in determining the rate of new firm formation. Estimating the model across urban and rural neighborhoods show that amenities are relatively more important in explaining new firm formation in rural areas as compared to urban. As such, our study contributes to the literature on diversification of the economies of rural areas by pointing at the important role that place-based amenities may play for an entrepreneurially-driven development of less developed and/or rural areas.

Highlights • The study combines approaches of neo-endogenous rural development, resource-based view of the firm, and smart specialization. • One of the very first studies analyzing the role of place-based amenities for new firm formation. • Local amenities are indeed important factors in determining the rate of new firm formation. • Amenities are relatively more important in explaining new firm formation in rural places as compared to urban places.