In order to examine the impacts of market size on entrepreneurship, we estimate a monopolistic competition model that involves the workers' decisions to pursue entrepreneurship by using data on Japanese prefectures. Our results show that a larger market size in terms of population density leads...

This paper examines the relationship between entrepreneurship (as measured by fluctuations in the business ownership rate) and unemployment in Japan for the period between 1972 and 2002. We find that, although Japan’s unemployment rate has been influenced by specific exogenous shocks, the...