Can Targeted Government Investment in Rural Establishments Induce Innovative Activity?

Author:

Mann John T.1ORCID,Miller Steven R.1,Malone Trey1ORCID

Affiliation:

1. Department of Agricultural, Food, and Resource Economics, Michigan State University, East Lansing, MI, USA

Abstract

Rural economic development strategies increasingly focus on “homegrown” economic policies, including investing in entrepreneurial development. However, few studies have evaluated the effectiveness of these strategies, in part because of data constraints. Using a mixed-methods approach, basic t-tests, fixed-effect probit regression, and propensity scoring techniques on data from the Small Business Innovation Research Program and the Rural Establishment Innovation Survey, this article tests the effectiveness of federal policies in inducing innovative activity in rural and urban establishments. The authors also explore indirect comparisons between rural and urban establishments. They find that Small Business Innovation Research (SBIR) awards can increase the likelihood that an establishment will act innovatively and that this effect may be larger in rural settings than in urban settings. Results suggest that targeted public investment can induce rural innovation.

Funder

National Institute of Food and Agriculture

Publisher

SAGE Publications

Subject

Urban Studies,Economics and Econometrics,Development

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