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Market size and entrepreneurship

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  • Yasuhiro Sato
  • Takatoshi Tabuchi
  • Kazuhiro Yamamoto

Abstract

In order to examine the impacts of market size on entrepreneurship, we estimate a monopolistic competition model that involves entrepreneurial decision by using data on Japanese prefectures. Our results show that a larger market size measured by the population density leads to higher incentive of people to become entrepreneurs. a 10 percent increase in the population density increases the share of people who wish to become entrepreneurs by 2 percent. In contrast, the self-employment ratio is lower in prefectures with higher population density, which suggests that the market size has different impacts on the entrepreneurship in different stages.

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Bibliographic Info

Article provided by Oxford University Press in its journal Journal of Economic Geography.

Volume (Year): 12 (2012)
Issue (Month): 6 (November)
Pages: 1139-1166

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Handle: RePEc:oup:jecgeo:v:12:y:2012:i:6:p:1139-1166

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References

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Citations

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Cited by:
  1. Yasuhiro Sato & Takatoshi Tabuchi & Kazuhiro Yamamoto, 2009. "Market Size and Entrepreneurship," Discussion Papers in Economics and Business 09-07, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  2. Behrens, Kristian & Pokrovsky, Dmitry & Zhelobodko, Evgeny, 2014. "Market Size, Entrepreneurship, and Income Inequality," CEPR Discussion Papers 9831, C.E.P.R. Discussion Papers.
  3. Elisabeth Bublitz & Michael Fritsch & Michael Wyrwich, 2013. "Balanced Skills and the City: An Analysis of the Relationship between Entrepreneurial Skill Balance, Thickness and Innovation," Jena Economic Research Papers 2013-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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