Understanding Differential Economic Performance (DEP) at the local and regional level is a key element in devising practical strategies and programmes for sustainable regional development in different contexts. This paper contributes to the understanding of the factors underlying persistent differences in DEP between rural localities. The basic hypothesis is that the DEP of rural areas can be explained by a combination of 'tangible' and 'less tangible' factors and the way in which these

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... in specific national, regional and local contexts. Natural and human resources, infrastructure, economic structure and investments are together with institutions, networks and community values the most decisive factors that help to characterise DEP for the Swedish case studies. Findings show that such factors not only define the different opportunities and constraints for local development, but also illustrate how effective the local and regional system is in tapping into resources and opportunities and in ameliorating constraints. This sheds light on the importance of taking a broader perspective regarding policies towards regional development, making them much more focused on contextual and environmental aspects than uni-faceted, sectoral measures. The paper also provides a discussion of the implications of the results for policy and gives an account of new research questions for future studies.