Self-employment by US county: key predictors

Some US counties are more likely to generate entrepreneurial opportunities than others. This paper aims to determine the linkages between US counties with disproportionately high shares of entrepreneurs and specific attributes of the entrepreneurial support system.

Non-farm proprietorship (NFP) has been used as a proxy for entrepreneurship and self-employment. NFP employment data were collected from the US Bureau of Economic Analysis by county. Data on all independent variables were obtained from the US Census and Bureau of Economic Analysis by county and subject to stepwise linear regression analysis.

Results revealed a strong positive relationship between the percent of NFP employment by county and the percent real estate, rental and leasing employment and construction employment as well as percent Hispanic and median age.

In attempting to encourage NFP employment, policymakers should be more aware of the key predictors that shape county-wide entrepreneurial ecosystems to enhance competitive advantage. Better understanding of the needs and experiences of different types of entrepreneurs and ecosystems can enhance overall quality of life and economic opportunity levels in a community.

The explicit spatial context of this paper has sometimes been overlooked in the traditional entrepreneurship literature, as such, this paper helps fill that gap. The findings provide a disaggregated analysis that can help better understand the key predictors that can drive the local choices of entrepreneurs and help local policymakers to build more competitive communities.