What side of town? How proximity to critical survival factors affects rural business longevity

Abstract

This research adds to the literature on locational determinants of business survival by focusing on an establishment's proximity to fixed assets. Using longitudinal, establishment-level data from rural counties in the Midwestern United States, we developed a hazard model to estimate the likelihood of rural businesses surviving the Great Recession and the recovery that followed (2007–2017). Two critical survival factors are of principal interest: proximity to a pre-automobile era downtown business district and proximity to a limited-access highway ramp. The results suggest that highway proximity enhances survival for manufacturing, transportation, and wholesaling establishments, as does own-industry agglomeration. For food, retail, and accommodation businesses, proximity to cultural anchor institutions enhances the probability of survival but competitive effects, including downtown proximity, reduce the likelihood of survival. On its own, proximity to a downtown was not associated with higher odds of business survival.