INFORMAL INSTITUTIONAL FACTORS INFLUENCING ENTREPRENEURIAL ACTIVITY IN RURAL AREAS

In this paper, we aim to analyse and compare the levels of entrepreneurial activity in rural areas with strong industrial and entrepreneurial history versus those that are not necessarily characterised by such a tradition. We specifically focus on the informal institutions and their influence over entrepreneurial activity levels. To attain this objective we undertake a logit model using a robust Spanish dataset from 2003. The main contribution of the study indicates that the difference between entrepreneurial activity levels in rural Catalonia and rural areas of the rest of Spain is in part explained by informal institutional factors, where the presence of entrepreneurial Role-Models is a prominent explanatory factor favouring entrepreneurial activity in rural areas with strong industrial tradition. Nevertheless, the results of the study suggest that the propensity towards entrepreneurial activity is conditioned by the evolution of the institutional framework