Modeling the Barriers to Rural Micro-Entrepreneurship Development

Introduction
Entrepreneurship and the development of micro‑businesses are widely recognized as fundamental strategies for diversifying rural livelihoods, reducing unemployment, and preventing rural out‑migration. Handicrafts represent one of the most effective forms of rural entrepreneurship and, as an important category of home‑based businesses, play a significant role in contributing to Gross Domestic Product (GDP). Moreover, handicrafts function as a catalyst for local trade and directly contribute to poverty reduction in rural areas by generating income and employment opportunities. Creating sustainable employment and promoting economic development in Mazandaran Province—an important agricultural region currently facing climate‑related challenges and a declining share of employment in agriculture—is therefore of particular importance. Despite the province’s rich indigenous resources and cultural potential, the growth and development of handicraft businesses face numerous structural, economic, and institutional constraints that require careful identification and analysis. Accordingly, the purpose of this study is to identify and present a model of the barriers and limitations affecting the development of micro‑entrepreneurship in rural handicraft units in Mazandaran Province.
 

Methodology

This study is applied in terms of its objective and adopts a descriptive–analytical research design using a survey method. The statistical population consisted of 2,690 rural handicraft entrepreneurs in Mazandaran Province. The sample size was determined using G‑Power software and calculated to be 246 respondents. A multi‑stage stratified random sampling method with proportional allocation was employed to select the sample. Data were collected using a structured questionnaire. The reliability of the instrument was confirmed through the calculation of Cronbach’s alpha coefficient. The face and content validity of the questionnaire were also verified based on the opinions of experts and specialists in entrepreneurship and rural development, as well as university faculty members. Data analysis was conducted using second‑order confirmatory factor analysis with SmartPLS version 3 software.
 

Findings

The results of the study identified six major categories of barriers to the development of entrepreneurship in rural handicrafts. Based on the path coefficients obtained from the structural model, the most significant barriers were identified as follows: individual–psychological barriers (0.838), managerial–structural barriers (0.822), educational–communicational barriers (0.820), technological–technical barriers (0.754), support–economic barriers (0.662), and political–institutional barriers (0.552). Among the variables related to managerial–structural barriers, the most influential factors were identified as the lack of managerial competencies among business owners and the inefficiency of traditional methods used to guide and support businesses in improving their productivity and performance.
 

Discussion and Conclusion

The findings indicate that the development of micro‑entrepreneurship in rural handicrafts in Mazandaran Province is a multidimensional issue influenced by a wide range of internal and external factors. From the perspective of entrepreneurs, the most significant limitations were external barriers, particularly political and institutional constraints. However, the structural analysis of the proposed model reveals that internal weaknesses—especially managerial‑structural deficiencies and gaps in knowledge and technical infrastructure (educational–communicational and technological barriers)—represent the most critical factors hindering the development of rural handicraft entrepreneurship. Based on these findings, the study recommends adopting a comprehensive and multidimensional approach to promote sustainable entrepreneurship in rural handicrafts in Mazandaran Province. Such an approach should simultaneously address managerial, educational, financial, and institutional challenges. The results of this research can assist planners and policymakers in designing effective support strategies tailored to local conditions through a deeper understanding of the existing barriers. These strategies can contribute not only to job creation and increased rural incomes but also to the preservation and revitalization of local culture and traditional arts. In this regard, several practical measures are recommended. These include providing applied management training and organizing short‑term practical workshops on financial management, marketing, pricing strategies, and human resource management tailored to rural business conditions. In addition, simplifying regulations related to business registration and licensing for rural micro‑enterprises can facilitate entrepreneurial activities. The establishment of agricultural knowledge‑based companies and rural small industries—supported by science and technology parks for rural youth and agricultural graduates—along with tax exemptions and insurance incentives, is also recommended. To address managerial barriers, greater emphasis should be placed on training and empowering local managers, particularly by strengthening the managerial skills of rural women and youth. Organizing specialized workshops for rural women can enhance their role in managing home‑based businesses and rural cooperatives. Furthermore, overcoming structural barriers requires strengthening participatory and local planning systems, enabling decision‑making through local councils and community‑based institutions while encouraging the active participation of women entrepreneurs. Expanding the use of microcredit funds and participatory investment mechanisms can also support entrepreneurial initiatives. Finally, addressing communication barriers requires the development of networking opportunities that facilitate information and experience exchange among entrepreneurs. This can be achieved by expanding communication networks and establishing or supporting online platforms and local networking groups for rural entrepreneurs.