So Close, Yet So Far: The Benefits and Limits of Rural–Urban Industry Linkages

Abstract

Rural–urban linkages have long been recognized as a potential rural economic development strategy. This article tests the potential effects of rural–urban linkages created through rural food manufacturing, tourism, and data processing centers on rural per capita income, employment, and population between 2009 and 2016. Using unique spatial interaction variables, we empirically estimate the Carlino–Mills conditional growth model for all rural counties in the contiguous US. Robustness checks reveal the limits of this economic development strategy by testing the model specification across different definitions of urban and rural places and varying spatial lags. Results suggest that both agritourism and data processing centers increase per capita incomes and employment through rural–urban linkages across distances, urbanicity, and rurality. The potential of beneficial rural–urban linkages associated with food manufacturing appears to be more situational, while creative class and outdoor recreation had small negative or insignificant rural-urban linkage effects on the three economic outcomes.