Revista de la Facultad de Ciencias Agrarias. Universidad Nacional de Cuyo. Tomo 57(1). ISSN (en línea) 1853-8665. Año 2025.

Original article

 

Remaining in rural areas: towards a rural entrepreneur’s analysis framework

Quedarse en las áreas rurales: Hacia un marco de análisis del emprendedor rural

 

Carlos Julian Ramirez Gomez1*,

Venancio Cuevas Reyes2,

Wyn Morris3

 

1 Universidad de Caldas. Departamento de Desarrollo Rural. Cl. 65 #26-10, Manizales Colombia.

2 Instituto Nacional de Investigaciones Forestales, Agrícolas y Pecuarias. Área de Economía Agrícola. Av. Progreso 5 Barrio de Santa Catarina 04010 Ciudad de México.

3 Aberystwyth University. Aberystwyth Business School. Wales. Penglais. Aberystwyth SY23 3FL. Reino Unido.

 

* cjulianmdr@gmail.com

 

 Abstract

This research employs an empirical approach to understand aspects defining why young people remain in their rural territories. Utilising a rural region of Caldas, Colombia as a case study and based on an agricultural education program for entrepreneurship, information from 368 rural young people was obtained. The study explored a conceptual model shaped by four dimensions and 34 variables. Using a Probit method, we identify significant variables regarding permanence in rural areas. We identify 11 key variables that determine the categories of socio-demographic profile, profile of entrepreneur characteristics, and category of motivations and territory. Our study contributes to literature on rural entrepreneurship from an empirical approach. Additionally, we propose a new analytical framework to address major problems in agriculture and rural territories, particularly in developing countries, such as Latin America.

Keywords: rural entrepreneurship, rural territories permanence, rural youth, entrepreneurship educational programs

 

Resumen

Este artículo emplea una perspectiva empírica para comprender los aspectos que definen por qué los jóvenes permanecen en sus territorios rurales. Utilizando un estudio de caso de una región rural de Colombia y con base en un programa de educación agrícola para el emprendimiento, se obtuvo información de 368 jóvenes rurales. El estudio exploró un modelo conceptual formado por cuatro dimensiones y 34 variables. Además, mediante un método Probit buscamos identificar las variables significativas sobre la permanencia en el área rural. En los resultados demostramos la existencia de 11 variables clave como determinantes en las categorías de perfil sociodemográfico, perfil de características del emprendedor y categoría de motivaciones y territorio. Nuestro estudio contribuye a la ampliación de la literatura sobre emprendimiento rural, desde un enfoque empírico y la propuesta de un nuevo marco analítico para abordar uno de los problemas más relevantes del sector agrícola y de los territorios rurales, especialmente en países en desarrollo como América Latina.

Palabras clave: emprendimiento rural, permanencia en territorios rurales, jóvenes rurales, programas educativos de emprendimiento

 

Originales: Recepción: 29/05/2024 - Aceptación: 03/12/2024

 

 

Introduction

 

 

The rural population, especially in developing countries faces an environment that has historically been characterized by certain restrictions on access to services, markets, technologies, and other public goods, these factors provide challenges for the design and promotion of public policies focused on the development of rural areas (19). However, various public policies and programs in developing countries aim to address these challenges, such as policies supporting and promoting agribusiness through strengthening strategies, financing, and marketing (35). There is promotion of educational programs for skills development and learning with a focus on the rural youth, and the promotion of entrepreneurship (18). These programs intend to make territorial permanence more attractive and address the problem of rural migration, especially youth migration (10).

In this sense, rural entrepreneurship (RE) gains importance given its implications from the productive, economic, social, and environmental point of view within rural territories. Rural Entrepreneurship is an important strategy to promote rural development. Entrepreneurship based on the sustainable use of local resources for creating new economic activities can help reduce unemployment and poverty, whilst generating alternatives for rural societies (11). Furthermore, rural entrepreneurship promotion is seen as a strategy to enhance the rural economy (26) and confront the migration problem of rural youth. These strategies are focused on the diversification of the local productive structure, value addition, the transition towards the service sector, and consideration of territorial characteristics (5, 16).

In this study we consider whether rural entrepreneurship is an exit or a result strategy, being a product of the behaviour, characteristics and actions of the rural entrepreneur as a promoter of the business project. Approaches on RE do not necessarily put the entrepreneur at the centre of the process as a dynamic and complex actor, with characteristics that could represent possible typologies of the entrepreneur. Therefore, we conceptually and empirically contribute to the research question: What aspects drive the rural entrepreneur to stay within the rural territory? That is, we consider that it is not the permanence over time of the business and the entrepreneurship project based on a set of strategies (22), but a greater understanding of what allows the permanence of the person in their territory and the vision they have of staying in the rural territory over time.

Despite rural education programs in entrepreneurship, the reasons for entrepreneurs remaining in the countryside might be the lack of better job alternatives, and the drive for needs (14); advantageous market opportunities (32), or certain perceptions regarding institutional support (34). There is a need to understand the role of the family, its historical perspective and its entrepreneurial culture in influencing rural youth and their interests in staying in rural areas. Therefore, it is necessary to identify what factors may determine the desire to stay within the territory. In this sense, the objective of this study is to determine the factors explaining the desire of rural entrepreneurs to stay within the rural territory, based on an analysis of the dimensions: Socio-demographic profile, Profile of entrepreneur characteristics, Entrepreneurship skills, Motivations, and Territory.

 

 

Construction of the conceptual and empirical model

 

 

In this study, we propose a conceptual model interrelating four dimensions (table 1).

 

Table 1. Dimensions and analysis variables of the conceptual model.

Tabla 1. Dimensiones y variables de análisis del modelo conceptual.

 

The main output of the model is the interest of young rural entrepreneurs in staying in their rural territory. The conceptual model is determined by dimensions usually found separately within the literature. Therefore, we propose their integration, generating a new conceptual model. Previous literature considers incorporating the sociodemographic profile on rural entrepreneurship analysis because sociodemographic variables have been positively associated with entrepreneurial intentions of rural young people (4), as well as the determination of innovative behaviour (28).

Secondly, for the most effective design of public policies on the repopulation of rural municipalities, the socio-demographic characteristics of rural entrepreneurs must be explored, since they tend to leave their territory (9). Furthermore, regarding the entrepreneurial characteristics dimension, our model proposes a profile approach directly related to the analysis around the rural entrepreneur’s desire in staying in the countryside. Therefore, we propose, addressing aspects such as the entrepreneur’s interest in impacting their rural and community environment, as well as impacting the use of local natural resources (28).

Our conceptual model considers the existence of two internal and external environments that interrelate a set of perceptions and variables, these contribute to understanding the desire of rural young people to stay in the countryside. The dimension of capabilities of the rural entrepreneur is one of the most addressed topics in the literature, a factor which we incorporate into the conceptual model of analysis. Aspects such as management, creativity, leadership, digital skills in rural entrepreneurship stand out as influencing the entrepreneur in the identification and recognition of business ideas (12). Finally, we include the integration of the motivation and territory dimension, based on a set of key variables that allow us to understand if the rural geographical space is a perceived viable environment by the rural entrepreneur to undertake a certain project (23).

 

 

Materials and methods

 

 

Study area context

 

 

Caldas is in the Colombian coffee zone, is a region with 27 rural municipalities (figure 1).

 

Figure 1. Study area.

Figura 1. Area de estudio.

 

In this region, the University of Caldas has led a public-private alliance “The University in the Field and in the Territory”, which carries out educational programs for rural youth allowing the development of agricultural entrepreneurship capabilities, facilitating the people involved to stay in their rural territories. In 2023, these educational programs involved around 1,100 rural youth throughout the entire geographic study area. This area is characterised by the influence of coffee production and industry, with various agroclimatic conditions and productive systems, creating entrepreneurship opportunities in agricultural, livestock, agro-industrial and tourism.

The research adopted a quantitative approach, with the data collection conducted in 2023. An online survey was created, with four domains and 34 variables (table 1); Socio-demographic profile, Profile of entrepreneur characteristics, Entrepreneurship skills, and Motivations and territory. Through a list of 1,100 previous students from agricultural programs for rural youth, a random sample of 368 people was obtained, which corresponds to a response rate of 33.45%. To advance the process, all students were informed of the program, whilst also attaching the form with the questions and the respective institutional letter of invitation to participate in the study. The questions on the survey were related to the proposed variables (table 1), in addition to various response options of nominal, ordinal, and dichotomous nominal types (table 2).

 

Table 2. Description of explanatory variables.

Tabla 2. Descripción de variables explicativas.

 

 

Method of information analysis

 

 

Data Analysis was carried out using a Probit model, which is a discrete choice model, where the endogenous variable presents two alternatives 0 and 1 (1). In this way, the dependent variable (Y) is related to the intention of rural youth to stay in the countryside. For our analysis, two values were assumed: 1 if the rural youth want to stay in the rural territory and 0 otherwise.

The econometric analysis in this study follows the stages developed by Cuevas-Reyes et al. (2020), and the theoretical underpinnings proposed by Aldrich & Nelson (1984). The Probit model uses a normal cumulative distribution function, where the probabilistic model is estimated by the maximum likelihood method and obtains the marginal change. Furthermore, the marginal change of the density function of the standard normal distribution is evaluated at a defined point and the parameter to be evaluated (17), as expressed in equation 1.

 

 

The empirical model that represents the dependent variable Y (Staying in the field) and the independent variables (X) that influence the decision to staying in the field, was the following:

 

where

Y = binary value aggregation variable

β_i = coefficients to be estimated

Xki = explanatory variables of the model (table 1)

ui = stochastic error.

In addition, the Wald test was used to evaluate paremeter individual significance. Overall goodness of fit was assessed by the McFadden’s R2 and the LR statistic or likelihood ratio. Finally, the results were obtained by using Data Analysis and Statistical package (2012).

 

 

Results and discussion

 

 

Descriptive statistics of socio-demographic profile

 

 

Based on the socio-demographic approach addressed in our study (table 3), the descriptive statistics revealed that the tendency of rural youth to emigrate from rural territories is greater (57.33%), despite the majority having agricultural educational training at the technical level.

 

Table 3. Descriptive statistics showing socio-demographic variables of rural youth.

Tabla 3. Estadísticas descriptivas a partir de variables socio-demográficas del joven rural.

 

The population results at younger ages (14 to 17 years), were similar across different areas of the rural geographic space. Therefore, it can be highlighted that the percentages of rural young people who currently have a business are lower, thus presenting a relationship with the low existence of family businesses. However, in contrast, it could be stated that of the percentage of young people who have active rural entrepreneurship (33.96%), the preferred trend for forming the business is with the family itself (36.68%). Against this, there is evidence that the local rural roots of family businesses can generate localized advantages and the construction of links that influence the desirability of forming these types of ventures (3).

 

 

Econometric model

 

 

The results of the econometric model reveal that of the total variables analysed, 11 of them are statistically significant (p<0.5) in relation to the four analysis dimensions of our model (table 4).

 

Table 4. Variables that influence the probability of staying in rural territory.

Tabla 4. Variables que influencian la probabilidad de quedarse en áreas rurales.

Own elaboration, dy/ dx is the marginal effect of the variable x on the dependent variable y; dy/dx significance level: P<0.05*; P<0.1**, and P<0.001***. Pseudo R2=0.3362.

Elaboración propia, dy/ dx es el efecto marginal de la variable x sobre la variable dependiente y; nivel de significancia dy/dx: P<0,05*; P<0,1**, y P<0.001***. Pseudo R2=0,3362.

 

The gender variable (x1) was significant at 90% (p<0.1) but with a negative sign, meaning that the probability of staying in the territory decreases by 11.7% if the gender is female compared to male. In addition, the rural geographic location variable (x5) was also significant at 90%, therefore, if the rural youth is located far away from the rural municipality, then their probability of remaining in the rural territory is 6%. The results reveal that the duration of entrepreneurship (x7) related to the agricultural sector was statistically significant (p<0.05), which means that those rural young people who have been involved with a rural project for the longest period have a probability of permanence in their rural territories of 13.2%. Likewise, the conformation of entrepreneurship (x8) was significant (p<0.05), which implies that it is a determining variable of the socio-demographic profile for the interest of young people to stay in their rural territories. However, the result expressed a negative sign compared to the marginal effect of the variable (x8) on the dependent variable of the model.

Therefore, the probability of remaining in the territory for young people can decrease by 6% if the enterprise is formed within a family that may prefer to initially undertake the enterprise individually compared to doing so in other forms of groupings. When analysing the entrepreneur’s characteristics profile, four key variables stand out as significant regarding the interest of rural young people in staying within their territories. Therefore, young people’s interest in rural entrepreneurship (x9) stands out as a significant variable (p<0.05) with a 16.5% probability of staying in the territory. Likewise, rural entrepreneurship is seen to impact the local and community environment (x10), it is a variable that was found to be significant (p<0.05) and a probability of youth permanence of 20.7%. Within this second component of the analysis model, variables are significant (p<0.05), such as the interest in participating in training (x12) and the interest of rural entrepreneurship in the impact on the environment and natural resources, both with their respective probabilities regarding the permanence of young people in their rural territories.

Finally, our results reveal three key and statistically significant variables in the motivations and territory component. Initially, where the rural youth lives is a motivating factor to stay in the countryside (p<0.5). In addition, the perception of prestige and reputation of the rural municipality (x32) showed significance (p<0.5) and a negative sign. This implied that the place where the young person lives and its perception are key aspects since the probability of the young person remaining in that territory can decrease by 26% if the issue of local reputation is not well perceived. This has implications for training and support programs for rural entrepreneurship in certain rural regions. Additionally, within this component of motivations and territory, our results highlight the perception of the entrepre­neurial personality of the inhabitant population of the rural municipality (x33). This variable emerges as highly significant (p<0.5) and the highest percentage probability on wanting to remain within their territory (38.1%). Therefore, this variable highlights the importance of what can be considered a local entrepreneurial culture as a factor that drives rural youth’s interest in staying within their region, since various entrepreneurial people can make use of the local culture and its tradition of activities to seek to potentialize their ideas (29).

 

 

Model determining variables

 

 

Our results allow us to interpret that eleven variables influence the interests of rural young people in wishing to remain within their territories. These are based on our proposed dimensions apart from entrepreneurship skills (table 5).

 

Table 5. Dimensions and determinant variables of the model.

Tabla 5. Dimensiones y variables determinantes del modelo.

 

Our model contributes to the discussion of expanding the understanding of phenomena associated with rural entrepreneurship. However, we also hold the critical position that, the issue of rural population migration to cities has not received the deserved attention in the research literature and requires further empirical studies (9).

The categories and variables determining the permanence of rural youth in their territory based on entrepreneurship can be divided into an internal environment such as the dimensions of the profile and skills for entrepreneurship, as well as an external environment based on what determines the territory as a motivational factor. From an interrelation of both environments, our study disproves the hypothesis according to which the promotion of rural education programs for entrepreneurship constitutes a strategy that ensures the territorial permanence of rural youth as they can develop or strengthen capacities for entrepreneurship. In fact, according to the approaches of Galvão et al. (2020), educational programs for entrepreneurship are decisive for the rural population since they contribute to the involvement and local interaction of actors, generating a support ecosystem that facilitates the entrepreneur’s action. However, in our study, the perception of institutional support and conditions of greater access to knowledge did not emerge as key variables. This could explain the interest of young people in staying within rural regions. Regarding the role of the family, the consideration of gender is an issue that cannot be ignored in the context of rurality. Our survey highlighted the highest percentage of female respondents. As Sidhu & Kaur (2006) propose, rural entrepreneurship is more beneficial for the current and multifunctional role of women, both for their function within the social system as generators of family income and their decision-making capacity in the family environment (15).

Additionally, our study presents results related to the profile characteristics of the rural entrepreneur, where four key variables are prominent. Our results are related to the approaches of Shivacharan et al. (2017), who highlight the importance of variables such as the interest of entrepreneurs in participating in training, which is related to a person with a tendency to search for information. Based on our results within the profile of characteristics of the entrepreneur, we agree that there is a tendency towards rural entrepreneurship to be seen as a vector of territorial development and a search for local sustainability in rural municipalities and a concern for the area (7, 20, 21). Therefore, we agree with educational programs in rural entrepreneurship strongly focusing on the role played by both the local place and the community (36). This means that the development of entrepreneurship capabilities by rural young people constitutes a factor of permanence, and implies the interrelation of other dimensions, such as the territorial dimension.

From the external environment of the rural entrepreneur, the perspective of the spatial-geographic role has been widely discussed in the scientific literature. However, few approaches associate the territorial issue with the permanence of the youth population from a vision of entrepreneurship especially in developing countries, even in Latin America. In this sense, considering motivations and territory, our results identify three key variables for analysing the model proposed in our study. The relationship between motivations and territory is important, as discussed by Modrego & Foster (2021), there are idiosyncratic territorial issues specific to rural entrepreneurship, which influence the perceptions of entrepreneurs and their possible decision-making. In fact, this geographical spatial dimension is considered an important element in the field of business culture compared to what is implied by the existence of visible success stories in the local area, which can motivate people to become rural entrepreneurs (32). This work is related to our results, which include variables associated with the perception of a local business mentality, and what the rural municipality implies as a motivating factor for the permanence of rural youth within. It could also be associated with the level of roots within the territorial culture (8).

Most studies do not consider the perception that young rural entrepreneurs have of their own municipal territory. However the study by Fanjul et al. (2023), refers to the existence of rural municipalities that can attract local people, and even neighbouring inhabitants, to the development of companies, which implies the importance of the geographical environment. Finally, our model shows the relevance of the interrelation of dimensions and environments, as even when rural young people have entrepreneurial skills, other aspects promote permanence in the territories. For this reason, this type of rural youth likely embodies certain local values and a sense of rurality, including the possibility of creating a local impact from their activity. There may be experiences not only of business development but also based on resource management, cultural and natural, where in the territory there is a tendency to build natural capital based on a certain sensitive perception about the interaction with the biophysical space (25).

 

 

Conclusions

 

 

Undoubtedly, the agricultural sector in developing countries, such as Latin America, faces numerous challenges and problems. Many of them are generated by the effects of the global and commercial environment, as well as by internal factors of the countries which have contributed to a declining situation for the sector. One of the most concerning problems is the migration of the young rural population towards urban and more densely populated areas. In response, countries such as Colombia have promoted a broad set of public policies, among which the implementation of agricultural educational programs stands out to strengthen the entrepreneurial capacities of this rural population. In addition, some public and private programs seek to financially support the emergence of rural enterprises.

However, the topic has not yet been sufficiently addressed in the literature, which constitutes the main contribution of our study. In this sense, we propose an analysis model of the rural entrepreneur, which seeks to understand the aspects that determine the interest of rural young people wanting to stay within their own rural territories. Furthermore, our findings contribute to a gap in the empirical analysis within the growing literature on rural entrepreneurship, where most studies present purely theoretical and conceptual approaches. We propose a conceptual model of analysis in which variables that relate an internal and external environment of the rural entrepreneur are considered. Furthermore, we consider several research opportunities on typology of rural entrepreneurs interested in developing a lifestyle within their rural territory. Finally, we consider that in the external environment of motivations and territory, the role of network links from rural entrepreneurs can be empirically explored, even between local actors at a meso level. However, not associated with entrepreneurship itself or business performance, but with the problem related to rural migration and the motivations for the entrepreneur to live within their rural environment.

 

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