Understanding rural business resilience during the COVID-19 pandemic

Abstract

The survival and performance of businesses depend in part on their resilience when confronted with crises such as the COVID-19 pandemic. Drawing on a unique, large-scale survey of 2600 non-farm rural businesses conducted during the COVID-19 pandemic, we explore how rural businesses, shaped by their context, cope with the adversity caused by the crisis. Clustering rural businesses based on their performance during the pandemic reveals four groups that are distinctive in their performance: a set of unaffected businesses, and three groups which were negatively affected, but where their performance varied nonetheless, with declining, stable, and growth trajectories. Businesses in the negatively affected but growth cluster are distinctive in their resilience strategy, business profiles, and environmental characteristics. Such businesses rate their community engagement as higher, but they are less dependent on their local economy for inputs and sales. They are also proactive in planning for uncertainties and adopt a more transformative strategy. The results have implications for both public policy and business strategies for promoting future business resilience in rural areas and beyond.