Northeast Regional Center for Rural Development

 

 

The Role of Innovation in Rural Firm Emergence and Vitality

Innovation lies at the heart of most entrepreneurial activity, and the goal of this USDA NIFA funded project was to deepen the understanding of whether and how entrepreneurial innovation can mitigate the growing economic threats facing rural U.S. workers and communities. This project, which ran from May 2018 through April 2023, utilized a newly available dataset that showed innovative activity, broadly defined, is far more prevalent in rural areas than was commonly believed; this dataset for the first time also allowed for in-depth research to examine the roles of different types of innovation in rural firm success. By combining this nationally representative, novel establishment-level data set with detailed Census micro data, the researchers tested hypotheses about the emergence and viability of rural entrepreneurship that could not be examined previously. In addition, by linking the establishment survey with founders’ information in the Census Survey of Business Owners and the Annual Survey of Entrepreneurs the researchers sought to provide unique insights on female and minority entrepreneurship.

Collaborators on the project included: 

  • Stephan J. Goetz (PI), Zheng Tian, and Luyi Han (NERCRD/Penn State)
  • Anil Rupasingha (USDA Economic Research Service)
  • Timothy Wojan (National Science Foundation)

Below is a list of impacts and outputs from this project, which will be updated regularly as the research team continues to write up their findings.

Impacts:

  • Through more than a dozen presentations to both national and international audiences made by members of the team, researchers, innovation policy makers, and non-technical audiences have increased their understanding of rural innovation, how it can be measured more effectively, and how it can be supported.
  • For example, the researchers found that cloud-based computing directly contributes to business innovation, but rural businesses lacking sufficient broadband capacity to access cloud services are missing out on their innovation-boosting potential. These findings can be used by policymakers and business-support organizations to foster greater opportunities for rural innovation, and they were shared widely through a peer-reviewed publication, a Penn State News release, and several presentations.

Publications:

Presentations:

  • Goetz, Stephan J. 2023. “Innovation and Exports: Differences in Rural and Urban US Firms.” Presented at the 62nd European Regional Science Association Congress, Alicante, Spain, August 31.
  • Han, Luyi, Stephan J Goetz, and Timothy R Wojan. 2022. “Experimenting in the Cloud: The Digital Divide’s Impact on Innovation.” Presented at the North American Regional Science Council Meetings, Montreal, Canada, November 9.
  • Han, Luyi, Zheng Tian, Stephan J. Goetz. 2023. “How Export Performance Is Mediated by Varieties of Innovation, Owner Characteristics, and Location.” Presented at the 62nd Annual Meeting of Southern Regional Science Association, Savannah, GA, April 30.
  • Han, Luyi, Zheng Tian, Stephan J. Goetz, and Timothy R Wojan. 2023a. “Are Some Innovation Self-Reports in the Annual Business Survey Biased? A Regression Discontinuity Test.” Presented at the 62nd Annual Meeting of Western Regional Science Association, Big Island, HI, USA, February 15, and at the 2022 Federal Committee on Statistical Methodology Research and Policy Conference, Washington, DC, October 25.
  • Han, Luyi, Zheng Tian, Stephan J. Goetz, Anil Rupasingha, and Timothy R Wojan. 2022. “Is User Entrepreneurship More Inclusive Entrepreneurship? Evidence from Two Micro Datasets.” Presented at the North American Regional Science Council, Montreal, Canada, November 10.
  • Han, Luyi, Zheng Tian, Stephan J. Goetz, and Timothy R. Wojan. 2023b. “Decomposing the Rural-Urban Export Gap: Evidence from U.S. Firms.” Presented at the 62nd European Regional Science Association Congress, Alicante, Spain, August 31.
  • Han, Luyi, Zheng Tian, Stephan J. Goetz, and Timothy R. Wojan. 2023c. “Decomposing the Rural-Urban Export Gap: Evidence from U.S. Firms.” Presented at the 70th Annual North American Meetings of the Regional Science Association International, San Diego, CA, November 15.
  • Han, Luyi, Zheng Tian, Timothy R. Wojan, and Stephan J. Goetz. 2024. “How Export Performance Is Mediated by Varieties of Innovation, Owner Characteristics, and Location.” Poster presented at the American Economic Association Annual Meeting, San Antonio, TX, January 5.
  • Han, Luyi, Timothy R Wojan, and Stephan J. Goetz. 2023b. “Internationalization of the Rural Nonfarm Economy and the Cloud: Evidence from US Firm-Level Export Data.” Presented at the 2023 Meeting of the Agricultural & Applied Economics Association, Washington, D.C., July 23.
  • Tian, Zheng, Luyi Han, Stephan J. Goetz. 2023. “User Entrepreneurship and Firm Employment Growth.” Presented at the 62nd Annual Meeting of Southern Regional Science Association, Savannah, GA, March 30-April 1, 2023, Savannah, GA, April 30.
  • Tian, Zheng, Luyi Han, and Stephan J. Goetz. 2023. “Examining Rural-Urban Innovation Disparities: A Study Using the Oaxaca-Blinder Decomposition Method.” Presented at the 70th Annual North American Meetings of the Regional Science Association International, San Diego, CA, November 16.
  • Tian, Zheng, Luyi Han, Timothy R. Wojan, Stephan J. Goetz, and Anil Rupasingha. 2024. “User Entrepreneurship and Firm Employment Growth.” Poster presented at the American Economic Association Annual Meeting, San Antonio, TX, January 5.
  • Tian, Zheng, Timothy R Wojan, and Stephan J. Goetz. 2023. “Growth Trajectories of Rural Innovative Firms.” Presented at the 62nd Annual Meeting of Western Regional Science Association, Big Island, HI, USA Feb 15 – 18, 2023, February 15.
  • Wojan, Timothy R. 2023. “Grassroots Design Meets Grassroots Innovation:  Rural Design Orientation and Firm Performance.” Presented at the 62nd European Regional Science Association Congress, Alicante, Spain, August 30.
  • Wojan, Timothy R, Zheng Tian, Luyi Han, and Stephan J Goetz. 2022. “SAIRE sans Satire? The Promise and Perils of Small Area Innovation Rate Estimation.” Presented at the North American Regional Science Council Meetings, Montreal, Canada, November 9.

Funding Agency: USDA NIFA

Principal Investigator: Stephan J. Goetz

Lead Institution: Penn State

Accompanying Institution(s): National Science Foundation, USDA Economic Research Service

Start Date: May, 2018   End Date: April, 2023

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