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This chapter reports a study that investigates the link between rural small firms’ social networks and their market diversification strategies in the context of the Internet.

Telephone interviews were conducted with a random sample of 142 Scottish small rural and urban firm owners in May 2012. The purpose of the telephone interviews was to understand how Internet usage impacted on the social networks and market diversification experiences of small rural firms. Analysis of the categorical data was performed using a variety of established methods.

Internet usage for many small Scottish rural firms was facilitating both their market reach and social networks. In addition, small rural firms’ most important social network contacts are highly correlated to their origin of sales, and this can be either locally or extra-locally based.

A positive relationship between Internet usage, social networks and market reach expansion offers support for further developing and improving the Internet infrastructure of rural communities.

Internet usage emerges as a critical tool for augmenting the social networks of Scottish rural small firms, which in turn helps to extend their market reach activities.

The purpose of this paper is to examine the impact firm proximity to financial centers has on announcement returns and time to deal completion for mergers and acquisitions.

Using a data set of merger and acquisition activity from 1986 to 2014, target and acquiring firms are classified as rural or urban based on their geographic proximity to major financial centers. The impact of this proximity on short-term acquisition announcement returns and on the amount of time required to complete the transaction are tested.

Markets react more favorably to the acquisition of firms headquartered in a rural area, likely due to increased information advantage on the part of the acquiring firm. Furthermore, the acquisition of a rural firm requires greater time to completion.

Acquiring firms may be able to use information asymmetry to their advantage when acquiring firms located in a more rural setting with higher levels of information asymmetry. However, this requires the acquiring firm to generate an informational advantage and will also require a greater time commitment on average to complete the deal.

While prior literature has demonstrated that the distance between target and acquirer can affect acquisition returns and time to deal completion, this study adds to the literature by demonstrating that the geographic location of the target firm relative to major financial hubs can have a unique effect on mergers and acquisitions as well.

The paper answers the following questions: (1) Do firms located in rural areas experience greater problems in accessing financial services? (2) If this is the case, what can these firms do to improve their access to finance?

This paper uses the pooled logistic regression and the data collected by the World Bank's Enterprise Surveys during the period between 2008 and 2018 to answer the aforementioned questions.

The results of this paper show that firms headquartered in rural (urban) areas experience greater (lower) problems in accessing finance than other firms. This paper attributes these findings to higher (lower) levels of information asymmetry and lower (higher) levels of density of banking operations in rural (urban) areas. The results of this paper also show that firms headquartered in rural areas can improve their access to finance by increasing the skill levels of their employees.

This paper highlights the actions that rural firms can undertake to overcome the adverse impact of their geographic location.

The aim of this paper is to consider empirical evidence on the strategic behaviour of rural SMEs compared to urban SMEs in times of difficult economic conditions. The authors build the paper from a theoretical discussion that suggests that there will be distinctive differences in SMEs’ strategic behaviour across different settlement patterns, utilising resource‐based and opportunity‐based theoretical perspectives. This leads to three research questions which are concerned with three elements when comparing urban and rural SMEs; their characteristics, their performance and their strategic behaviours. The paper argues that the role and strategic behaviour of SMEs in the literature has been neglected.

For this study, the paper is able to draw upon a data set of 1,411 SMEs from an annual survey of New Zealand's SMEs. This is a national survey of SMEs and the paper has analysed the data to draw out distinctive differences with firms located in different urban or rural locations.

The paper has shown that SMEs in independent urban areas/small town settlements have distinctive characteristics, performance and strategic behaviour. The important findings are that geographical location matters; that impacts of changing economic conditions cannot be assumed to be homogenous across economies and that SMEs across different settlement patterns will adopt different strategic response and behaviours.

The paper provides an original contribution to knowledge through the following: a primary focus on the comparison of urban and rural SMEs’ strategic behaviour in challenging and turbulent economic conditions, providing for the first time empirical evidence on the sustainability of rural SMEs in recessionary times compared to urban firms across three different locational settlement patterns; urban, independent urban and rural.

The 1998 Survey of Small Business Finances provides robust information on the financing of small businesses, including an overview of the firms’ organization, financial characteristics, and credit use. Information from the survey is used in this study to compare the financial characteristics of metro and rural small businesses. While many financial characteristics are similar, rural small businesses do own more land and depreciable assets, and have lower inventory and other current assets when compared to metro firms. Rural firms have relatively similar access to technology and financial services, although utilization varies. Both metro and rural small businesses rely on a wide variety of sources for financing; however, rural small businesses have significantly more mortgages, loans from shareholders, and other types of loans, but fewer credit cards. Use of nonparametric rank order statistical methods was required because normality assumptions were violated due to asymmetric distribution of small firms.

The innovation creation literature primarily focuses on urban firms/regions or relies heavily on these data; less studied are rural firms and areas in this regard. The purpose of this paper is to employ a new firm-level data set, national in scale, and analyze characteristics that potentially influence innovation creation across rural and urban firms.

The authors use the 2014 National Survey of Business Competitiveness (NSBC) covering multiple firm-level variables related to innovation creation combined with secondary data reflecting the regional business and innovative environments where these firms operate. The number of patent applications filed by these firms measures their innovation creation, and the paper employs a negative binomial regression estimation for analysis.

After controlling for industry, county and state factors, rural and urban firms differ in their innovation creation characteristics and behaviors, suggesting that urban firms capitalize on their resources better than rural firms. Other major findings of the paper provide evidence that: first, for rural firms, the influence of university R&D is relevant to innovation creation, but their perception of university-provided information is not significant; and second, rural firms that are willing to try, but fail, in terms of innovation creation have a slight advantage over other rural firms less willing to take on the risk.

This paper is one of the first to analyze the 2014 NSBC, a firm-level national survey covering a wide range of innovation-related variables. The authors combine it with other regional secondary data, and use appropriate analytical modeling to provide empirical evidence of influencing factors on innovation creation across rural and urban firms.

This paper aims to examine how organisational values affect diversity in terms of different competencies in rural family Small and Medium-sized Enterprises (SMEs). Recruiting a diverse workforce in rural family SMEs can be particularly difficult due to the prevalence of internal family values and the lack of available local specialised competencies. A deficiency of diversity in employment and competence acquisition and development can create problems, as it often prevents rural family SMEs from recruiting employees with a wide variety of qualifications and skills.

The study takes on a multi-case method of Swedish rural family SMEs, applying a qualitative content analysis approach. In total, 20 in-depth structured interviews are conducted with rural family SME owners and 2 industries were investigated and compared – the tourism and the manufacturing industries.

Rural family SMEs lack long-term employment strategies, and competence diversity does not appear to be a priority for rural family SMEs, as they often have prematurely decided who they will hire rather than what competencies are needed for their long-term business development. It is more important to keep the team of employees tight and the family spirit present than to include competence diversity and mixed qualifications in the employment acquisition and development.

Contrary to prior research, our findings indicate that rural family SMEs apply short-term competence diversity strategies rather than long-term prospects regarding competence acquisition and management, due to their family values and rural setting, which strictly narrows the selection of employees and competencies. Also, a general reluctance towards competence diversity is identified, which originates from the very same family values and rural context.

This paper seeks to understand the evolution of financial intermediation in the course of China's economic transition.

The research is based on a unique data set collected by the authors and other collaborators from a 1998 survey of financial institutions, enterprises, and government officials in southern China.

Based on an empirical investigation of rural financial reforms, it is argued that China's two‐decade long financial reform was a gradual process that accommodates reforms in other sectors and responds to changing policy goals and the economic and institutional environment in which financial institutions operate. Although using standard measures of financial system performance may cast doubt on the effectiveness of China's rural banking system, when one understands the different roles that it has been asked to play, it can be argued that it has not operated so poorly.

In conclusion, it is found that China's rural economic environment is still changing. If the system continues to change in the future, responding to pressures in the economy, further financial reforms will almost certainly emerge in the coming years.

These findings, although primarily from the 1980s and 1990s, are still helpful in understanding the reform process that is currently ongoing.

This paper will help readers make sense of agricultural financial reforms and will allow for more discourse over what has been accomplished and what still is needed.

This is the first manuscript to comprehensively put China's rural financial reforms into the context of modern economic analysis, explaining why China's government proceeded as they did and why the reforms have unfolded in such a stop and start manner.

The purpose of this paper is to investigate website quality in rural firms in four countries, by using Gonzalez and Palacios's Web Assessment Index (WAI). There is an assertion in the literature that quality is lower amongst rural firms than urban firms, and lower amongst small firms than large firms. The disadvantages of lack of access to skills and economic peripherality in rural areas are attributed to this. Concurrently, there is reason to surmise that the websites of firms in transition economies may be higher quality than those in market economies. The paper aims to explore websites in distinct rural regions to investigate if variation occurs.

To evaluate website quality the WAI was applied to a sample of 60 rural firms representing 15 each in Scotland, New Zealand, Southern Russia and Hunan Province in China. Analysis of the categorical data was performed using a variety of established methods.

The WAI is of use in terms of website quality management. Additionally, comparisons between the quality of websites in the sample of small rural firms with those of large firms in previous studies support the contention that large firms generally have better quality websites. Results also illustrate that there are some differences in website quality between rural small businesses in the different locations. In particular, small rural firms in Hunan Province in China had websites of observable better quality than those elsewhere. The authors conclude that skills, knowledge and infrastructure have a bearing on the sophistication of small firms' websites.

Implications include that variation in the rural economy by region prevails as the rural economy is not, as often implied, a homogeneous concept.

There are implications in terms of exploring the effects of regulation, culture and infrastructure on rural small to medium-sized enterprises (SMEs). The internet may indeed contribute to rural economies, but only insofar as it is facilitated by infrastructure and access to skills, and by culture and perceived usefulness by business owners.

The paper contributes to the understanding of rural entrepreneurship as a heterogeneous concept by comparing practice in four distinct rural regions. It also adds weight to the emerging identification of exogenous factors as being at least as much a factor in determining the use of ICT in rural SMEs as endogenous motivations, skills and resources.

This paper aims to analyse the capacity of rural and urban spaces to promote innovation in the agro‐food firms. The purpose is to determine if the rural/urban division affects the innovative behaviour of agriculture, food processing and food distribution firms.

Business data have been obtained for over 2,000 firms based in the Valencia region, Spain. Out of them, over 200 declared to have taken part in R&D&i activities, mainly in partnership with public support institutions. The database supplies data of micro and small enterprises, which have been typically underestimated in the Spanish Survey on Technological Innovation in Enterprises. The database also makes it possible to identify the main location of agro‐food business, and the territory is divided in Local Labour Systems (LLS). LLS were in turn classified as rural or urban according to alternative criteria (OECD, national legislation). A logit model has been used in the analyses.

The location of enterprises according to the rural/urban divide does not appear relevant concerning innovation, although businesses orientated to the primary sector seem less innovative. Co‐op businesses appear to be more innovative.

The paper offers an approach of innovation in the agro‐food traditionally considered as a non‐innovative system. It explores how territory affects innovation using data from firms.