What causes differences in profitability between companies in rural and urban areas?

Corporate profits seem to have increased more in urban areas than in rural areas in 2008-2017. This project aims to explain the development of a widening profit gap between rural and urban companies. It could be caused by several factors: differences in recovery after the financial crisis, differences in industry composition or agglomeration effects. Agglomeration effects increase the productivity in urban areas, when knowledge, infrastructure and capital cluster.

The project uses the FRIDA database which contains firm data for 2003-2019. The project is expected to be completed in 2022.

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