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<p>Drawing on entrepreneurial ecosystems framework and endogenous growth theories, this study investigates the impact of U.S. Department of Agriculture (USDA) rural investments on county-level business dynamics in the United States. Findings show a small and positive correlation between investments and business applications, with a 1% rise in investment leading to a 0.0163% increase in applications 3&#xa0;years later, indicating a small effect. However, the effects on other business outcomes are mixed. The analysis reveals no significant change in the total number of business establishments and limited effects on business entry rates. Additionally, negative effects on net job creation are observed, especially for firms with 6–10 employees and 1–19 employees. Although the investments appear to have a stabilizing effect on some established businesses, as evidenced by reduced exit rates for firms with 20 + employees, the overall results highlight the limited effectiveness of these investments in promoting sustainable rural economic development. Robustness checks, including the examination of specific investment types, mediation analyses, and heterogeneity analysis, provide additional insights into how different forms of investment interact with local conditions. Our findings contribute to an understanding of the limited effectiveness of USDA rural investments in promoting rural business dynamics.</p>

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Sowing the seeds of rural prosperity? The limited impact of USDA investments on county-level business dynamics

  • 期刊论文

  • 发表日期：

    2025年10月28日

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  • Pankaj C. Patel

摘要

Drawing on entrepreneurial ecosystems framework and endogenous growth theories, this study investigates the impact of U.S. Department of Agriculture (USDA) rural investments on county-level business dynamics in the United States. Findings show a small and positive correlation between investments and business applications, with a 1% rise in investment leading to a 0.0163% increase in applications 3 years later, indicating a small effect. However, the effects on other business outcomes are mixed. The analysis reveals no significant change in the total number of business establishments and limited effects on business entry rates. Additionally, negative effects on net job creation are observed, especially for firms with 6–10 employees and 1–19 employees. Although the investments appear to have a stabilizing effect on some established businesses, as evidenced by reduced exit rates for firms with 20 + employees, the overall results highlight the limited effectiveness of these investments in promoting sustainable rural economic development. Robustness checks, including the examination of specific investment types, mediation analyses, and heterogeneity analysis, provide additional insights into how different forms of investment interact with local conditions. Our findings contribute to an understanding of the limited effectiveness of USDA rural investments in promoting rural business dynamics.