The end of the urban-rural dichotomy? Towards a new regional typology for SME performance

Abstract

Rurality is a regional geographical characterization that defines the nature of the external economic environment and consequently affects the performance of SMEs. However, the concept of rurality comprises a heterogeneous group of areas. In this paper, we examine the economic performance of 98 Municipal Regional Counties (MRCs) in the province of Quebec (Canada) in an urban-rural perspective. In a first step, we propose an extended and multidimensional typology defining rurality, using a set of spatial and industrial variables, from which we obtain 15 rural/urban types of MRCs. In a second step, we test for significant differences between these types, for a wide range of variables measuring firm performance, internal firm capacities and the regional economic competitiveness. Our results indicate that rurality may be too broad a concept to categorize the economic situation of “non-urban” regions. We do observe significant differences between regions, but not always on an urban-rural division. We show that geographic remoteness and the nature of the regions’ industrial base may be more useful to characterize their particular economic environment to the economic performance of SMEs.