Optimism for new business survival in rural communities: an institutional perspective

Abstract

This study uses institutional theory to examine the relationship between rural community norms and optimism for new firm survival. A survey of 1161 residents and business owners in 32 rural US communities explored community-wide attitudes toward change and norms related to community and local business sector symbolic and performative actions and their influence on local residents’ optimism about prospects for success of new businesses. Multiple regression analysis revealed that institutional norms supporting change and reflecting positive attitudes regarding residents’ and business owners’ actions in the task environments are positively related to community optimism about new firm survival. Evidence also supports differential effects of population size on norms related to openness to change and retailer performative actions. Findings suggest that the rural community institutional environment may have an influence on efforts to attract and retain new businesses in rural communities.