Spatial Patterns of Production Linkages in the Context of Europe's Small Towns: How Are Rural Firms Linked to the Local Economy?

Courtney P., Lépicier D. and Schmitt B. Spatial patterns of production linkages in the context of Europe's small towns: how are rural firms linked to the local economy?, Regional Studies. Small towns have received increasing attention from policy-makers aiming to stimulate rural development through territorial approaches. However, it cannot be assumed that fostering local business growth will help generate local economic development either through economies of agglomeration or through spillover effects into surrounding locales. The paper examines the spatial economic behaviour of firms located in and around 30 towns across five European countries. It tests a number of hypotheses regarding the influence of various characteristics on the strength of local economic integration: organizational characteristics, local contextual characteristics, and characteristics of the potential links between the firm and local markets. Findings reveal that the more ‘traditional’ and less productive rural firms exhibit stronger ties to their locality and the size of the local intermediate goods market influences the extent to which firms source locally. Differences in terms of country, area and town size highlight the importance of local contexts in explaining patterns of spatial economic behaviour