Understanding differential economic performance at local and regional levels is akey element in devising practical strategies and programmes for sustainable rural and regionaldevelopment in different contexts. The project DORA – Dynamics of Rural Areas deals withregional and local differences in rural Europe. The DORA project seeks to improve ourunderstanding of the factors underlying and explaining persistent differences in economicperformance between rural localities. The basic hypothesis is that the differential development ofrural areas can be explained by a combination of ‘tangible’ and ‘less tangible’ factors and theway in which these interact in specific national, regional and local contexts. Such factors notonly define different opportunities and constraints for local development, but also illustrate howeffective the local and regional system is in tapping resources and opportunities and amelioratingconstraints. This paper provides a discussion of the preliminary results for the Swedish casestudy areas based on the analysis of ten factors as well as the interrelationships between them toexplain differential economic performance and gives an account of methodological challengeswhen combining qualitative and quantitative methods.