What is really different about rural and urban firms? Some evidence from Northern Ireland

The economic structure of rural regions in Europe is becoming increasingly similar to that of urban regions. Therefore, what is really different about rural and urban firms? This question is investigated here through a comparison of matched manufacturing plants in rural and urban areas of Northern Ireland. The analysis finds that remote rural, accessible rural and urban manufacturing plants that are matched with respect to their industrial sector, size, age and ownership structure are nevertheless different in certain key respects. Remote rural manufacturing plants are seen to follow a production-cost-oriented export strategy, while accessible rural firms adopt a more innovation-oriented export strategy. In contrast, urban manufacturing plants use their reputation-based competitive advantage to service relatively large local markets. The competitiveness of rural firms is particularly influenced by the quality of transport infrastructure, the availability of suitably qualified staff, and external trade factors. Given this complex set of factors, effective policy initiatives in this area may involve measures that cut across departmental and national boundaries.