Previous research has focused on the role of new businesses in regional economic growth (e.g. Acs, 2010). Peripheral and especially rural areas are usually economically weaker or even deprived (Cannarella and Piccioni 2006) compared to their urban core counterparts. This phenomenon has been examined by studies conducted in different countries, both developing (Lanjouw 2001) and developed (Kalantaridis 2009). This study analyzes the factors that cause differences in employment growth between young SMEs in core and peripheral regions. Employment growth is a primary measure of venture performance (Andersson et al. 2013). Particular attention is given in our study to factors that interact with the firm’s regional location in their effect on its growth.