The Role of Entrepreneurial Climate in Rural Tourism Development

Abstract

Tourism development has been embraced in the last decade as an economic development tool for rural areas. A parallel movement has recently swelled, emphasizing entrepreneurship as a viable strategy for economic sustenance. This study combines the two areas, and in particular examines the entrepreneurial climate of a community and its contribution to tourism development.

A scale of 36-items was developed to assess various aspects of a community known to support entrepreneurial activity. The scale was combined with demographic questions and items to assess a respondent's general attitude towards tourism to form the survey instrument, which was then distributed via email to 3,290 North Carolina residents. Ultimately, 92 respondents were included in the sample, resulting in a 3% response rate. Exploratory factor analysis was used principle component analysis with Varimax rotation was used to reveal seven subscales of entrepreneurial climate (e-climate). The seven subscales were labeled Community Culture, Training & Assistance, Institutional Support, Quality of Life Amenities, Business Services, Economic Development-Infrastructure Support, and Natural Resources-Tourism Business Support.

These e-climate subscales, along with additional county-based descriptors, were included as independent variables in a multiple regression analysis to determine their importance in explaining the dependent variable Tourism Expenditures. County-based descriptors included the economic health of a county (Economic Tier), the population and remoteness of the county (Rural-Urban Continuum Code), the level of tourism support in the county (Tourism Support), and the potential for tourism development (Tourism Opportunity). Multiple regression analysis revealed a model of five variables can be attributed to explain nearly 33% of the variance Tourism Expenditures: Rural-Urban Continuum Code, Economic Tier, Tourism Opportunity, Business Services and Economic Development-Infrastructure Support. Rural-Urban Continuum code explained the most variance (18%), followed by Economic Tier (10%). The combined e-climate subscales of Business Services and Economic Development-Infrastructure Support explained 10.5% of the variance in the dependent variable.

Additional analyses were conducted to assess differences between groups on the seven e-climate subscales. Differences between groups would indicate a need for programmatic, marketing and/or educational changes. Sixteen variables were examined; four were based on county characteristics and twelve were based on traits of respondents. Out of 28 analyses on county-based variables, nine statistically significant differences were found at the p<.05 level and ten at the p<.10 level. Out of 84 analyses on respondent-based variables, only eight statistically significant differences were found at the p<.05 level and eleven at the p<.10 level.

This study contributes to the measurement of entrepreneurial climate as well as to the understanding of its impact on tourism development.