Impact of COVID mobility measures on the financial performance of small business in rural areas of Spain

Like much of the world, when COVID-19 struck, Spain implemented strict lockdowns and mobility restrictions to contain the virus. While essential for public health, these measures had severe economic consequences, especially for small businesses. Many urban firms faced closures and significant losses. However, the experience of rural businesses remained less clear. This study seeks to understand how small enterprises in rural Spain fared during the pandemic and whether changes in population movement shaped their outcomes.

A key finding was a notable shift in daily population patterns within rural areas. During the pandemic, more people stayed in rural zones throughout the day due to remote work, temporary relocation from cities, or reduced commuting. This increased local presence had implications for rural businesses, particularly those dependent on local demand.

During the pandemic, many small rural businesses experienced declines in revenue and employment, especially in sectors like hospitality and real estate. However, rural areas with a larger daytime population saw a relatively faster recovery during the lockdowns. This suggests that a greater local population helped sustain the demand for goods and services, cushioning the economic blow in certain areas.

The effects varied across industries. Firms in digitally adaptable sectors—such as information technology and professional services—were more resilient, showing smaller declines in performance. Conversely, businesses reliant on face-to-face interaction, particularly in sectors where staffing levels are hard to adjust (e.g., transportation, arts, and entertainment), experienced more pronounced losses in productivity.

These findings highlight the critical role of local population dynamics in shaping business resilience. Even a temporary increase in the local population in rural areas can create meaningful economic opportunities for small firms. This has important policy implications. Rather than focusing solely on urban recovery or large-scale economic support, policymakers might consider tailored strategies for rural areas—such as supporting local-demand industries, improving digital infrastructure, and incentivizing remote work.

Furthermore, flexible employment practices and digital adaptation could enhance long-term resilience by preparing rural industries for future disruptions. The results also suggest that policies supporting population retention—such as affordable housing, transport access, and digital connectivity—can have a significant economic payoff for rural communities.

The COVID-19 pandemic reshaped people's lives and work, offering unexpected insights into rural economic dynamics. While small rural firms faced substantial challenges, those in areas with higher population retention demonstrated greater resilience. This study underscores the importance of place-based strategies in economic recovery and suggests that empowering rural businesses can contribute to a more balanced and robust national economy. David Peon, Vik Singh, Jorge Rodriguez-Alvarez (2025). Impact of post-COVID mobility measures on the financial performance of small business in rural areas. Journal of Rural Studies (Accepted).