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This paper estimates the influence that rural-to-urban commuting has on rural employment growth, and whether the strength and spatial reach of this effect depend on commuters' levels of education. A main finding is that rural-to-urban commuting has a robust positive impact on rural employment growth in services and retail. There is no significant difference in how far these effects reach into rural Sweden for commuters with different levels of education. These results suggest that a viable policy for local employment growth in rural areas with reasonable commuting times to urban centers is to improve the commuting to urban centers.*I express my acknowledgments to Mark D. Partridge, managing editor of the Journal of Regional Science, for excellent guidance and valuable comments on the manuscript. In addition, I am grateful to Johan Klaesson, John Källström, and the three anonymous reviewers for their careful reading of my manuscript and for providing constructive comments on my work. I would also like to express my appreciation to Martin Andersson and Thomas Niedomysl for their encouragement and appreciative feedback on the many different versions of the manuscript.

This paper seeks to understand how distance to urban centres influences necessity and opportunity‐based firm start‐ups. The results show that closeness to urban centres is not necessarily beneficial for firm start‐ups. On the contrary, regions further away from urban centres of any size experience more firm start‐ups. One explanation of this result is that regions experience spatial protection from urban competition. However, regions located further away from larger‐sized urban centres experience less firm start‐ups due to such remoteness. One explanation of this finding is that remote regions cannot access the agglomeration benefits that larger cities offer. This supports the view that rural regions draw on urban resources but only on those from larger agglomerations.

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