Rural entrepreneurship and institutional supportexploring the effects on Community-led Local Development

Resumen

Entrepreneurship has garnered substantial recognition as a catalyst for driving economic development, fostering job creation, and addressing pressing social and environmental issues. Its significant potential has consistently drawn the interest of policymakers and scholars alike. Presently, the majority of entrepreneurship research focuses on industrial districts within urban settings. While this research is valuable, it may not fully capture the diverse contexts and challenges faced by entrepreneurs in other settings. In particular, it may be unable to capture the reality of rural entrepreneurs in industrialized counties. These entrepreneurs are integral for the development of rural areas and have a huge potential to drive employment and development in the region. However, the literature that acknowledges their distinctive challenges and opportunities is still scant. An expanding body of research strives to study entrepreneurship within its regional context, thereby offering valuable insights for policymakers. The present thesis seeks to contribute to contextualize to this literature by analyzing the contribution of European, national and regional public policies to rural entrepreneurship. To achieve this goal, three analysis were carried out: The first analysis provides an overview of the literature on public support for European rural entrepreneurs. In the light of the scarce literature on the topic, this is important to help contextualize rural entrepreneurship and to provide tailored policy recommendations. Through a Systematic Literature Review, this research offers a synthesis of articles across different research fields, integrating policy recommendations and implications for both academics and practitioners. The second analysis focuses on Community-Led Local Development, a European program set to foster entrepreneurship, rural service innovation and development. This program adopts an innovative approach by empowering local stakeholders through a "bottom-up" method, rather than centrally dictating the allocation of aid. To analyze this program, we construct a novel dataset with information on over 12.6 million beneficiary projects (covered in Appendix I). 8 The third analysis delves deeper into the causal effects of this policy upon different sectors. Since one of the policy’s main objectives is to contribute to the innovative provision of rural services, we compare its result for the service sector and explore whether territories with worse service provision are more prone to receiving the aid. These analysis shed light on the differences and nuances in the concept of rural entrepreneurship across the literature, highlight problems accessing local data and provide valuable policy implications. They also show the positive effect of the program Community-Led Local Development, both upon general employment and the service sector. Especially, for those municipalities that also received aid to improve basic infrastructure and foster innovation. Nonetheless, the effect of the program is limited for service entrepreneurs and ventures. Considering that this is one of its main priorities, these points to the need to redesign some aspects of the policy. Finally, this doctoral dissertation seeks to contribute to improve future waves of aid and to foster entrepreneurship in rural areas of Europe. The final part of the thesis will outline policy recommendations based on the Systematic Literature Review and in the econometric analysis undertaken.