Survival Rates of Rural Businesses: What the Evidence Tells Us

Across the rural-urban divide the average five-year survival rate across all birth year cohorts for urban (metro) counties was less than for rural (non-metro) counties, 67% and 70%, respectively.  This is consistent with the findings of others (Buss and Lin, 1990; Renski, 2009; Yu, Orazem, and Jolly, 2011).  If the definitions of rural and urban are refined along a broader spectrum from large urban to remote sparsely populated rural, the relatively high survival rates in rural areas becomes even more pronounced (Figure 2). In fact, the analysis reveals a survival gradient along the rural-urban spectrum.  At the extremes, new businesses in remote small rural areas have a five-year survival rate of 72% which is statistically significantly greater than the largest urban areas where the rate is 67%.