Double-tier Business Networking in Rural and Urban Regions
Keywords:
Rural; Farm; Entrepreneur; Small Business; Double-tier; Networking; Local Development
Abstract
Rural regions are undergoing many changes, including the field of employment, entrepreneurship development and the growth of small businesses. In many cases business owners in rural areas far from large cities face challenges such as customer shortage, seasonality, lack of professional workers and, therefore, unrealized growth potential. Consequently, the rate of development and success of these businesses is relatively small compared to similar businesses in urban areas. Business networking is one way for business owners in rural areas to cope these challenges. This paper is based on an Israeli study, comparing small businesses in rural areas and similar small businesses in large cities, examining the business networking characteristics in rural areas and their impact on the development potential of these small businesses. We present both quantitative findings and results from in-depth interviews conducted with entrepreneurs in rural areas. The findings clarify the rationale leading entrepreneurs in rural areas to set up small businesses and develop new and different business networks including local and external collaborations, thus promoting the growth potential of their businesses and the rural areas in general.
References
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Baù, M., Chirico, F., Pittino, D., Backman, M., & Klaesson, J. (2018) Roots to grow: Family firms and local embeddedness in rural and urban context. Entrepreneurship Theory and Practice. 43(2), 360-385. doi:1042258718796089.
Ben-Aharon, N. (2018) Business in numbers – a business Survey 2018. Ministry of Economy and Industry, Agency for Small Businesses. Published by the Agency for Small Businesses in the Ministry of Economy. Retrieved from:
https://www.sba.org.il/hb/PolicyAndInformation/Researches/Documents/asakim%20be%20misparim%202018.pdf
Ben-Dror, G., & Sofer, M. (2010) Aspects of weakening cooperation in the Israeli moshav. Journal of Rural Cooperation 38(2), 156: 156-172.
Bennett, R. J., Robson, P. J., & Bratton, W. J. (2001) The influence of location on the use by SMES of external advice and collaboration. Urban Studies, 38(9), 1531-1557.
Bosworth, G., & Turner, R. (2018) Interrogating the meaning of a rural business through a rural capital framework. Journal of Rural Studies, 60, 1-10.
Bryman, A. (2006) Integrating quantitative and qualitative research: How is it done? Qualitative Research, 6(1), 97-113.
Buckley, P. J. (2012) The Multinational Enterprise as a Global Factory. Handbook of Research on International Strategic Management, 77-92. Farringham: Edward Elgar Publishing.
Busch, L. (2010) Can fairy tales come true? The surprising story of neoliberalism and world agriculture. Sociologia Ruralis, 50(4), 331-351.
Carolan, M. S. (2013) The wild side of agro‐food studies: On co‐experimentation, politics, change, and hope. Sociologia Ruralis, 53(4), 413-431.
Casciaro, T., & Piskorski, M. J. (2005) Power imbalance, mutual dependence, and constraint absorption: A closer look at resource dependence theory. Administrative Science Quarterly, 50(2), 167-199.
Coad, A., Daunfeldt, S. O., Hölzl, W., Johansson, D., & Nightingale, P. (2014). High-growth firms: introduction to the special section. Industrial and Corporate Change, 23(1), 91-112.
Corcoran, J., Faggian, A., & McCann, P. (2010) Human capital in remote and rural Australia: The role of graduate migration. Growth and Change, 41(2), 192-220.
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Foreman-Peck, J., & Nicholls, T. (2013) SME takeovers as a contributor to regional productivity gaps. Small Business Economics, 41(2), 359-378.
Gabay, Y. and Rob, R. (2001) The policy of exposure to imports and abolition of devaluation substitutes: Implications for the national economy. In: Ben-Bassat, A. (ed.), From Government Involvement to the Market Economy - The Israeli Economy 1985-1998; A collection of studies in memory of Prof. Michael Bruno, Tel Aviv: Am Oved, 381-343. (Hebrew)
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Gao, S., Xu, K., & Yang, J. (2008) Managerial ties, absorptive capacity, and innovation. Asia Pacific Journal of Management, 25(3), 395-412.
Greckhamer, T. (2016) CEO compensation in relation to worker compensation across countries: The configurational impact of country‐level institutions. Strategic Management Journal, 37(4), 793-815.
Greenberg, Z. (2012) How personal characteristics of the residents of community extension neighborhoods affect their sense of belonging to the new place. Ofakim Ba-Geographia, 81-82, 91 -105. (Hebrew)
-----. (2013) Homemade wine production in the Golan Heights: Aspects of changes and adjustments to the era of the global economy. In: N. Cleut, and Y. Charney (Eds.), Studies on Haifa and Northern Israel: A Collection of Articles in Honor of Prof. Baruch Kipnis Haifa: University of Haifa, pp. 199-214. (Hebrew)
Gulati, R., & Sytch, M. (2007) Dependence asymmetry and joint dependence in interorganizational relationships: Effects of embeddedness on a manufacturer's performance in procurement relationships. Administrative Science quarterly, 52(1), 32-69.
Haltiwanger, J., Jarmin, R. S., & Miranda, J. (2013) Who creates jobs? Small versus large versus young. Review of Economics and Statistics, 95(2), 347-361.
Hashai, N., & Buckley, P. J. (2014) Is competitive advantage a necessary condition for the emergence of the multinational enterprise? Global Strategy Journal, 4(1), 35-48.
Henrekson, M., & Johansson, D. (2010) Gazelles as job creators: A survey and interpretation of the evidence. Small Business Economics, 35(2), 227-244.
Heilbrunn, S. (2010) Entrepreneurial opportunities in changing communities. Journal of Small Business and Enterprise Development, 17(2), 247-259.
Heilbrunn, S., Abu-Asbeh, K., & Abu Nasra, M. (2014) Difficulties facing women entrepreneurs in Israel: A social stratification approach. International Journal of Gender and Entrepreneurship, 6(2), 142-162.
Hinrichs, C. C. (2000) Embeddedness and local food systems: Notes on two types of direct agricultural market. Journal of Rural Studies, 16(3), 295-303.
Hoggart, K., Black, R., & Buller, H. (2014) Rural Europe. London: Routledge.
Ingleheart, R. (1990). Culture Shift in Advanced Industrial Society. Princeton: Princeton University Press.
Ivankova, N. V., Creswell, J. W., & Stick, S. L. (2006) Using mixed-methods sequential explanatory design: From theory to practice. Field Methods, 18(1), 3-20.
Kalantaridis, C., & Bika, Z. (2006) In-migrant entrepreneurship in rural England: Beyond local embeddedness. Entrepreneurship and Regional Development, 18(2), 109-1
Karsten, L. (2007) Housing as a way of life: Towards an understanding of middle-class families’ preference for an urban residential location. Housing Studies, 22 (1), 83–98.
Kimhi, A. (2009) Heterogeneity, specialization and social cohesion in Israeli moshav cooperatives. Journal of Rural Cooperation, 37 (1), 124-136.
Kline, P. & Moretti, E. (2014) Local economic development, agglomeration economies, and the big push: 100 years of evidence from the Tennessee Valley Authority. The Quarterly Journal of Economics, 129(1), 275-331.
Labrianidis, L. (2006) Human capital as the critical factor for the development of Europe’s rural peripheral areas. In: T.N. Vaz, E.J. Morgan and P. Nijkamp eds.) The New European Rurality: Strategies for Small Firms. Farnham: Ashgate, pp.41-59
Lampe, M., Willenbockel, D., Ahammad, H., Blanc, E., Cai, Y., Calvin, K., & Kyle, P. (2014) Why do global long‐term scenarios for agriculture differ? An overview of the AGMIP global economic model inter-comparison. Agricultural Economics, 45(1), 3-20.
Le Breton ‐ Miller, I., & Miller, D. (2009) Agency vs. stewardship in public family firms: A social embeddedness reconciliation. Entrepreneurship Theory and Practice, 33(6), 1169-1191.
Lewis, S., & Humbert, L. (2010) Discourse or reality? “Work-life balance”, flexible working policies and the gendered organization. Equality, Diversity and Inclusion: An International Journal, 29(3), 239-254.
Long, H., & Woods, M. (2011) Rural restructuring under globalization in eastern coastal china: What can be learned from Wales? Journal of Rural and Community Development, 6(1), 70-94.
McLaughlin, H., Uggen, C., & Blackstone, A. (2012) Sexual harassment, workplace authority and the paradox of power. American Sociological Review, 77(4), 625-647.
Noordhoff, C. S., Kyriakopoulos, K., Moorman, C., Pauwels, P. & Dellaert, B. G. (2011) The bright side and dark side of embedded ties in business-to-business innovation. Journal of Marketing, 75(5), 34-52.
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O’Toole, K., & Macgarvey, A. (2003) Rural women and local economic development in south-west Victoria. Journal of Rural Studies, 19(2), 173-186.
Özen, Ş., Uysal, Ö. Ö., & Çakar, M. (2016) Seemingly embedded but obviously exploitative relations: Organizational contingencies of mutual dependence, power imbalance and embedded relations. European Management Review, 13, 53–68.
Pallares-Barbera, M., Tulla, A. F., & Vera, A. (2004) Spatial loyalty and territorial embeddedness in the multi-sector clustering of the Berguedà region in Catalonia (Spain). Geoforum, 35(5), 635-649.
Preibisch, K. (2012) Migrant workers and changing work-place regimes in contemporary agricultural production in Canada. International Journal of Sociology of Agriculture & Food, 19(1), 31-57.
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Qadeer, M. A. (2000) Ruralopolises: The spatial organisation and residential land economy of high-density rural regions in South Asia. Urban Studies, 37(9), 1583-1603.
Ritchie, B. K. (2009) Economic upgrading in a state-coordinated, liberal market economy. Asia Pacific Journal of Management, 26(3), 435-453.
Schnell, I., Benenson, I., & Sofer, M. (1999) The spatial pattern of Arab industrial markets in Israel. Annals of the Association of American Geographers, 89(2), 312-337
Schnell, I., Greenberg, Z., Arnon, S., & Shamai, S. (2015) Entrepreneurship in the periphery and local growth: The case of northern Israel. GeoJournal, 82(2), 217-229.
Sherman, N. and Keidar, P. (1993) Non-agricultural businesses in the moshav communities. Rehovot: The Center for Development Studies. (Hebrew)
Shortall, S. (2002) Gendered agricultural and rural restructuring: A Case Study of Northern Ireland. Sociologia Ruralis, 42(2), 160-175.
Smallbone, D., & Welter, F. (2001) The Role of government in SME development in transition economies. International Small Business Journal, 19(4), 63-77.
Sofer, M. (2004) The Second generation in the moshav: Agriculture and pluriactivity. Ofakim BaGeographia, 60-61, 119-126. (Hebrew)
Sofer, M. and Applebaum, L. (2008) Self-driven business entrepreneurship on the family homestead and its contribution to the development of agriculture and the rural community. Beit Dagan: The Chief Scientist Office at the Ministry of Agriculture. (Hebrew)
Sofer, M., & Saada, M. A. (2016) Entrepreneurship of women in the rural space in Israel: Catalysts and obstacles to enterprise development. Sociologia Ruralis, 57, 769-790.
Spain, D. (1993) Been-heres versus come-heres negotiating conflicting community identities. Journal of the American Planning Association, 59(2), 156-171.
Swain, L. L., & Garasky, S. (2007) Migration decisions of dual-earner families: An application of multilevel modeling. Journal of Family and Economic Issues, 28(1), 151-170.
Taylor, B. M. (2010) Between argument and coercion: Social coordination in rural environmental governance. Journal of Rural Studies, 26(4), 383-393.
Uzzi, B. (1996) The sources and consequences of embeddedness for the economic performance of organizations: The network effect. American Sociological Review, 674-698.
Ailey, T. (2018) Relocation of kibbutz members and their spouses from the center of the country to a kibbutz in the periphery. MA Thesis, Department of Sociology and Anthropology, Bar-Ilan University, Tel Aviv, Israel. (Hebrew)
Baù, M., Chirico, F., Pittino, D., Backman, M., & Klaesson, J. (2018) Roots to grow: Family firms and local embeddedness in rural and urban context. Entrepreneurship Theory and Practice. 43(2), 360-385. doi:1042258718796089.
Ben-Aharon, N. (2018) Business in numbers – a business Survey 2018. Ministry of Economy and Industry, Agency for Small Businesses. Published by the Agency for Small Businesses in the Ministry of Economy. Retrieved from:
https://www.sba.org.il/hb/PolicyAndInformation/Researches/Documents/asakim%20be%20misparim%202018.pdf
Ben-Dror, G., & Sofer, M. (2010) Aspects of weakening cooperation in the Israeli moshav. Journal of Rural Cooperation 38(2), 156: 156-172.
Bennett, R. J., Robson, P. J., & Bratton, W. J. (2001) The influence of location on the use by SMES of external advice and collaboration. Urban Studies, 38(9), 1531-1557.
Bosworth, G., & Turner, R. (2018) Interrogating the meaning of a rural business through a rural capital framework. Journal of Rural Studies, 60, 1-10.
Bryman, A. (2006) Integrating quantitative and qualitative research: How is it done? Qualitative Research, 6(1), 97-113.
Buckley, P. J. (2012) The Multinational Enterprise as a Global Factory. Handbook of Research on International Strategic Management, 77-92. Farringham: Edward Elgar Publishing.
Busch, L. (2010) Can fairy tales come true? The surprising story of neoliberalism and world agriculture. Sociologia Ruralis, 50(4), 331-351.
Carolan, M. S. (2013) The wild side of agro‐food studies: On co‐experimentation, politics, change, and hope. Sociologia Ruralis, 53(4), 413-431.
Casciaro, T., & Piskorski, M. J. (2005) Power imbalance, mutual dependence, and constraint absorption: A closer look at resource dependence theory. Administrative Science Quarterly, 50(2), 167-199.
Coad, A., Daunfeldt, S. O., Hölzl, W., Johansson, D., & Nightingale, P. (2014). High-growth firms: introduction to the special section. Industrial and Corporate Change, 23(1), 91-112.
Corcoran, J., Faggian, A., & McCann, P. (2010) Human capital in remote and rural Australia: The role of graduate migration. Growth and Change, 41(2), 192-220.
Crandall, M. S., & Weber, B. A. (2004) Local social and economic conditions, spatial concentrations of poverty, and poverty dynamics. American Journal of Agricultural Economics, 86(5), 1276-1281.
Central Bureau of Statistics (CBS) 2014) 2008 socio-economic index of regional councils and the change in clusters compared to 2006. Retrieved from: http://www.cbs.gov.il/publications13/1530/pdf/tab01_02.pdf
Dosi, G., & Malerba, F. (1996) Organizational learning and institutional embeddedness. In: Dosi, G., & Malerba, F. (Eds.), Organization and Strategy in the Evolution of the Enterprise. London: Palgrave Macmillan, 1-24.
Fingleton, B., Eraydin, A., & Paci, R. (2017). Introduction: SMEs and regional growth. In B. Fingleton, A. Eraydn, & R. Paci (Eds.), Regional economic growth, SMEs and the wider Europe, London: Routledge, pp. 1-9.
Foreman-Peck, J., & Nicholls, T. (2013) SME takeovers as a contributor to regional productivity gaps. Small Business Economics, 41(2), 359-378.
Gabay, Y. and Rob, R. (2001) The policy of exposure to imports and abolition of devaluation substitutes: Implications for the national economy. In: Ben-Bassat, A. (ed.), From Government Involvement to the Market Economy - The Israeli Economy 1985-1998; A collection of studies in memory of Prof. Michael Bruno, Tel Aviv: Am Oved, 381-343. (Hebrew)
Gaddefors, J., Korsgaard, S., & Ingstrup, M. B. (2020) Regional development through entrepreneurial exaptation: Epistemological displacement, affordances, and collective agency in rural regions. Journal of Rural Studies, 74, 244-256.
Gao, S., Xu, K., & Yang, J. (2008) Managerial ties, absorptive capacity, and innovation. Asia Pacific Journal of Management, 25(3), 395-412.
Greckhamer, T. (2016) CEO compensation in relation to worker compensation across countries: The configurational impact of country‐level institutions. Strategic Management Journal, 37(4), 793-815.
Greenberg, Z. (2012) How personal characteristics of the residents of community extension neighborhoods affect their sense of belonging to the new place. Ofakim Ba-Geographia, 81-82, 91 -105. (Hebrew)
-----. (2013) Homemade wine production in the Golan Heights: Aspects of changes and adjustments to the era of the global economy. In: N. Cleut, and Y. Charney (Eds.), Studies on Haifa and Northern Israel: A Collection of Articles in Honor of Prof. Baruch Kipnis Haifa: University of Haifa, pp. 199-214. (Hebrew)
Gulati, R., & Sytch, M. (2007) Dependence asymmetry and joint dependence in interorganizational relationships: Effects of embeddedness on a manufacturer's performance in procurement relationships. Administrative Science quarterly, 52(1), 32-69.
Haltiwanger, J., Jarmin, R. S., & Miranda, J. (2013) Who creates jobs? Small versus large versus young. Review of Economics and Statistics, 95(2), 347-361.
Hashai, N., & Buckley, P. J. (2014) Is competitive advantage a necessary condition for the emergence of the multinational enterprise? Global Strategy Journal, 4(1), 35-48.
Henrekson, M., & Johansson, D. (2010) Gazelles as job creators: A survey and interpretation of the evidence. Small Business Economics, 35(2), 227-244.
Heilbrunn, S. (2010) Entrepreneurial opportunities in changing communities. Journal of Small Business and Enterprise Development, 17(2), 247-259.
Heilbrunn, S., Abu-Asbeh, K., & Abu Nasra, M. (2014) Difficulties facing women entrepreneurs in Israel: A social stratification approach. International Journal of Gender and Entrepreneurship, 6(2), 142-162.
Hinrichs, C. C. (2000) Embeddedness and local food systems: Notes on two types of direct agricultural market. Journal of Rural Studies, 16(3), 295-303.
Hoggart, K., Black, R., & Buller, H. (2014) Rural Europe. London: Routledge.
Ingleheart, R. (1990). Culture Shift in Advanced Industrial Society. Princeton: Princeton University Press.
Ivankova, N. V., Creswell, J. W., & Stick, S. L. (2006) Using mixed-methods sequential explanatory design: From theory to practice. Field Methods, 18(1), 3-20.
Kalantaridis, C., & Bika, Z. (2006) In-migrant entrepreneurship in rural England: Beyond local embeddedness. Entrepreneurship and Regional Development, 18(2), 109-1
Karsten, L. (2007) Housing as a way of life: Towards an understanding of middle-class families’ preference for an urban residential location. Housing Studies, 22 (1), 83–98.
Kimhi, A. (2009) Heterogeneity, specialization and social cohesion in Israeli moshav cooperatives. Journal of Rural Cooperation, 37 (1), 124-136.
Kline, P. & Moretti, E. (2014) Local economic development, agglomeration economies, and the big push: 100 years of evidence from the Tennessee Valley Authority. The Quarterly Journal of Economics, 129(1), 275-331.
Labrianidis, L. (2006) Human capital as the critical factor for the development of Europe’s rural peripheral areas. In: T.N. Vaz, E.J. Morgan and P. Nijkamp eds.) The New European Rurality: Strategies for Small Firms. Farnham: Ashgate, pp.41-59
Lampe, M., Willenbockel, D., Ahammad, H., Blanc, E., Cai, Y., Calvin, K., & Kyle, P. (2014) Why do global long‐term scenarios for agriculture differ? An overview of the AGMIP global economic model inter-comparison. Agricultural Economics, 45(1), 3-20.
Le Breton ‐ Miller, I., & Miller, D. (2009) Agency vs. stewardship in public family firms: A social embeddedness reconciliation. Entrepreneurship Theory and Practice, 33(6), 1169-1191.
Lewis, S., & Humbert, L. (2010) Discourse or reality? “Work-life balance”, flexible working policies and the gendered organization. Equality, Diversity and Inclusion: An International Journal, 29(3), 239-254.
Long, H., & Woods, M. (2011) Rural restructuring under globalization in eastern coastal china: What can be learned from Wales? Journal of Rural and Community Development, 6(1), 70-94.
McLaughlin, H., Uggen, C., & Blackstone, A. (2012) Sexual harassment, workplace authority and the paradox of power. American Sociological Review, 77(4), 625-647.
Noordhoff, C. S., Kyriakopoulos, K., Moorman, C., Pauwels, P. & Dellaert, B. G. (2011) The bright side and dark side of embedded ties in business-to-business innovation. Journal of Marketing, 75(5), 34-52.
OECD (2016) SME and Entrepreneurship Policy in Israel 2016. Retrieved from
http://www.oecd.org/israel/sme-and-entrepreneurship-policy-in-israel-2016-9789264262324-en.htm
O’Toole, K., & Macgarvey, A. (2003) Rural women and local economic development in south-west Victoria. Journal of Rural Studies, 19(2), 173-186.
Özen, Ş., Uysal, Ö. Ö., & Çakar, M. (2016) Seemingly embedded but obviously exploitative relations: Organizational contingencies of mutual dependence, power imbalance and embedded relations. European Management Review, 13, 53–68.
Pallares-Barbera, M., Tulla, A. F., & Vera, A. (2004) Spatial loyalty and territorial embeddedness in the multi-sector clustering of the Berguedà region in Catalonia (Spain). Geoforum, 35(5), 635-649.
Preibisch, K. (2012) Migrant workers and changing work-place regimes in contemporary agricultural production in Canada. International Journal of Sociology of Agriculture & Food, 19(1), 31-57.
Polanyi, K, (1957) The Economy as an Instituted Process. In: K. Polanyi, M. C. Arensberg, H. W. Pearson (eds.), Trade and Market in the Early Empires. New York: Free Press, 243-270.
Qadeer, M. A. (2000) Ruralopolises: The spatial organisation and residential land economy of high-density rural regions in South Asia. Urban Studies, 37(9), 1583-1603.
Ritchie, B. K. (2009) Economic upgrading in a state-coordinated, liberal market economy. Asia Pacific Journal of Management, 26(3), 435-453.
Schnell, I., Benenson, I., & Sofer, M. (1999) The spatial pattern of Arab industrial markets in Israel. Annals of the Association of American Geographers, 89(2), 312-337
Schnell, I., Greenberg, Z., Arnon, S., & Shamai, S. (2015) Entrepreneurship in the periphery and local growth: The case of northern Israel. GeoJournal, 82(2), 217-229.
Sherman, N. and Keidar, P. (1993) Non-agricultural businesses in the moshav communities. Rehovot: The Center for Development Studies. (Hebrew)
Shortall, S. (2002) Gendered agricultural and rural restructuring: A Case Study of Northern Ireland. Sociologia Ruralis, 42(2), 160-175.
Smallbone, D., & Welter, F. (2001) The Role of government in SME development in transition economies. International Small Business Journal, 19(4), 63-77.
Sofer, M. (2004) The Second generation in the moshav: Agriculture and pluriactivity. Ofakim BaGeographia, 60-61, 119-126. (Hebrew)
Sofer, M. and Applebaum, L. (2008) Self-driven business entrepreneurship on the family homestead and its contribution to the development of agriculture and the rural community. Beit Dagan: The Chief Scientist Office at the Ministry of Agriculture. (Hebrew)
Sofer, M., & Saada, M. A. (2016) Entrepreneurship of women in the rural space in Israel: Catalysts and obstacles to enterprise development. Sociologia Ruralis, 57, 769-790.
Spain, D. (1993) Been-heres versus come-heres negotiating conflicting community identities. Journal of the American Planning Association, 59(2), 156-171.
Swain, L. L., & Garasky, S. (2007) Migration decisions of dual-earner families: An application of multilevel modeling. Journal of Family and Economic Issues, 28(1), 151-170.
Taylor, B. M. (2010) Between argument and coercion: Social coordination in rural environmental governance. Journal of Rural Studies, 26(4), 383-393.
Uzzi, B. (1996) The sources and consequences of embeddedness for the economic performance of organizations: The network effect. American Sociological Review, 674-698.
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