Document Type : Research Paper


1 Department of Public Administration, Faculty of Management, South Tehran Branch, Islamic Azad University, Tehran, Iran.

2 Faculty of Industrial Engineering, South Tehran Branch, Islamic Azad University, Tehran, Iran.



Rural entrepreneurship is one of the most important goals of policy-makers to develop villages and prevent migration from rural to urban areas. Significant challenges at the rural entrepreneurship level have reduced the entrepreneurship development process. Recognizing these challenges can be constructive in identifying the various dimensions related to rural entrepreneurship and removing barriers to rural business development. This study aims to identify the effective financial factors on entrepreneurship in rural small businesses and rank these factors. The research method applied based on purpose and data collection is a semi-structured interview done through interviews with academic experts, implementers of rural employment and entrepreneurship projects, and entrepreneurs. Data analysis and validation of financial factors on rural entrepreneurship in both service and agriculture sectors were performed using the fitting of a time-series regression model. The results indicate a positive and significant effect of rural population ratio, financing through financial institutions, economic growth, openness rate in business space, gender composition, and inflation rate in agriculture sectors, as well as a significant reverse effect of official employment rate, job-seeking population ratio, exchange rate uncertainty, government employment rate and graduation ratio on entrepreneurship in both service and agriculture sectors. Finally, the results of the Friedman test showed that the financing factor through financial institutions has the highest average rating due to the bank-oriented financial resources of entrepreneurial enterprises in the rural service and agriculture sectors. Therefore, policy-makers seeking to develop rural entrepreneurship should prioritize policies related to the ease of access of rural businesses to financial resources.


Main Subjects

[1]     Bosworth, G., & Turner, R. (2018). Interrogating the meaning of a rural business through a rural capitals framework. Journal of rural studies, 60, 1–10. DOI:10.1016/j.jrurstud.2018.02.002
[2]     Lang, R., & Fink, M. (2019). Rural social entrepreneurship: The role of social capital within and across institutional levels. Journal of rural studies, 70, 155–168. DOI:10.1016/j.jrurstud.2018.03.012
[3]     Greenberg, Z., Farja, Y., & Gimmon, E. (2018). Embeddedness and growth of small businesses in rural regions. Journal of rural studies, 62, 174–182. DOI:10.1016/j.jrurstud.2018.07.016
[4]     Sutter, C., Bruton, G. D., & Chen, J. (2019). Entrepreneurship as a solution to extreme poverty: A review and future research directions. Journal of business venturing, 34(1), 197–214. DOI:10.1016/j.jbusvent.2018.06.003
[5]     Bhuiyan, M. F., & Ivlevs, A. (2019). Micro-entrepreneurship and subjective well-being: Evidence from rural Bangladesh. Journal of business venturing, 34(4), 625–645. DOI:10.1016/j.jbusvent.2018.09.005
[6]     Wu, J., Zhuo, S., & Wu, Z. (2017). National innovation system, social entrepreneurship, and rural economic growth in China. Technological forecasting and social change, 121, 238–250. DOI:10.1016/j.techfore.2016.10.014
[7]     Fallah, M. R. (2018). Identifying drivers affecting micro-business development in rural home business. New marketing research journal, 8(3), 119-140. (In Persian).
[8]     Galvão, A. R., Mascarenhas, C., Marques, C. S. E., Braga, V., & Ferreira, M. (2020). Mentoring entrepreneurship in a rural territory: A qualitative exploration of an entrepreneurship program for rural areas. Journal of rural studies, 78, 314–324. DOI:10.1016/j.jrurstud.2020.06.038
[9]     de Guzman, M. R. T., Kim, S., Taylor, S., & Padasas, I. (2020). Rural communities as a context for entrepreneurship: Exploring perceptions of youth and business owners. Journal of rural studies, 80, 45–52. DOI:10.1016/j.jrurstud.2020.06.036
[10]   De Clercq, D., Lim, D. S. K., & Oh, C. H. (2013). Individual-level resources and new business activity: The contingent role of institutional context. Entrepreneurship: theory and practice, 37(2), 303–330. DOI:10.1111/j.1540-6520.2011.00470.x
[11]   Nyanzu, F., & Quaidoo, M. (2017). Access to finance constraint and SMEs functioning in Ghana.
[12]   Anton, S. G., & Bostan, I. (2017). The role of access to finance in explaining cross-national variation in entrepreneurial activity: A panel data approach. Sustainability (Switzerland), 9(11), 1947–1963. DOI:10.3390/su9111947
[13]   Deller, S., Kures, M., & Conroy, T. (2019). Rural entrepreneurship and migration. Journal of rural studies, 66, 30–42. DOI:10.1016/j.jrurstud.2019.01.026
[14]   Vernet, A., Khayesi, J. N. O., George, V., George, G., & Bahaj, A. S. (2019). How does energy matter? Rural electrification, entrepreneurship, and community development in Kenya. Energy policy, 126, 88–98. DOI:10.1016/j.enpol.2018.11.012
[15]   Barnett, W. A., Hu, M., & Wang, X. (2019). Does the utilization of information communication technology promote entrepreneurship: Evidence from rural China. Technological forecasting and social change, 141, 12–21. DOI:10.1016/j.techfore.2019.01.007
[16]   Faraji Sabkbar, H. A., Badri, S. A., Sajasi Gheiydari, H., Sadeghlu, T., & Shahdadi Khajeh Asgar, A. (2011). Prioritization of entrepreneurship development in rural areas using Prometheus technique (case study: suburban rural district of Khodabandeh County, Zanjan province). Human geography research, 43(75), 53–68. (In Persian).
[17]   Alavizade, S. A. (2018). Entrepreneurship and its role in sustainable rural development (case study: Ilam province). A scientific journal of Ilam culture, 18(56/57), 154-170. (In Persian).
[18]   Rezaei, M., Chaharsooghi, S. K., Husseinzadeh Kashan, A., & Babazadeh, R. (2020). Optimal design and planning of biodiesel supply chain network: a scenario-based robust optimization approach. International journal of energy and environmental engineering, 11(1), 111–128. DOI:10.1007/s40095-019-00316-1