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Market Size and Entrepreneurship

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  • Yasuhiro Sato

    ()
    (Graduate School of Economics, Osaka University (Japan))

  • Takatoshi Tabuchi

    ()
    (Faculty of Economics, University of Tokyo (Japan))

  • Kazuhiro Yamamoto

    ()
    (Graduate School of Economics, Osaka University (Japan))

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

Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 09-07.

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Length: 30 pages
Date of creation: Feb 2009
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Handle: RePEc:osk:wpaper:0907

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Web page: http://www.econ.osaka-u.ac.jp/
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Keywords: market size; entrepreneurship; density economies; market expansion;

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Cited by:
  1. 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, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2013-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. SATO Yasuhiro & TABUCHI Takatoshi & YAMAMOTO Kazuhiro, 2012. "Market Size and Entrepreneurship," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 12002, Research Institute of Economy, Trade and Industry (RIETI).
  3. Behrens, Kristian & Pokrovsky, Dmitry & Zhelobodko, Evgeny, 2014. "Market Size, Entrepreneurship, and Income Inequality," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9831, C.E.P.R. Discussion Papers.

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