Retail Business Pattern Changes in Rural Development

Abstract

This paper explores the changes of interdependence in retail business pattern to illustrate its positive effects to far rural development. A possible agglomeration for a far rural development is tested from the perspectives of both decision making theory and firm location theory. Although a difference-in-difference model weaken statistical demerits of overdispersion, it is still a challenge to reach a moderate scale caused by discrete consumption demand of sectorial heterogeneity in a far rural county. Contrary to eliminate correlation of both observed and unobserved factors, empirical results based on an assumption of continuous demand for large regional development indicate that interdependence with unobserved factors is statistically significant among all retail firm establishments in far rural county through 12 sectors, and became stronger from year 1998 to 2008, particularly, to those rural counties where income per capita is higher than national level. Thus, policy implication of this research indicates potential feasibility of community-programs for far rural development.

Keywords: rural development; retail; interdependence; US

JEL Classification: O18, R11