The Role of Entrepreneurial Climate in Rural Tourism Development

Tourism development has been embraced in the last decade as an economic development tool for rural areas. A parallel movement has recently swelled, emphasizing entrepreneurship as a viable strategy for economic sustenance. This study combines the two areas, and in particular examines the entrepreneurial climate of a community and its contribution to tourism Development. Schimla City in Himachal Pradesh State was the research area. It is a deprived and Beautiful state which is settled in North West of India. The research design was a descriptive and correlation surveying method. Exploratory factor analysis was used to reveal seven subscales of entrepreneurial climate (e-climate). The seven subscales were labeled Community Culture, Training & Assistance, Institutional Support, Quality of Life Amenities, Business Services, Economic Development-Infrastructure Support, and Natural Resources-Tourism Business Support. These e-climate subscales, along with additional county-based descriptors, were included as independent variables in a multiple regression analysis to determine their importance in explaining the dependent variable Tourism Expenditures. County-based descriptors included the economic health of a county (Economic Tier), the population and remoteness of the county (Rural-Urban Continuum Code), the level of tourism support in the county (Tourism Support), and the potential for tourism development (Tourism Opportunity). This study contributes to the measurement of entrepreneurial climate as well as to the understanding of its impact on tourism development. Implications for management and policy are also suggested.