Abstract

Abstract
Since employment is one of the core requirements of society, and unemployment is the origin of many economic,
social, and cultural anomalies, the necessity of investigating the current status of unemployment in the province,
aswell as, the heavy responsibility of the central government and local officials to generate employment and alleviate
unemployment comes into prominence. Accordingly, entrepreneurship as a key tool for creating jobs, and reducing
unemployment rate takes on increasing importance among the countrys experts and policy makers. A great deal of
uncertainty surrounding the kind of relationship between entrepreneurship and unemployment exists in developing
countries. Some experts state that there is a positive relationship between these two economic variables, i.e., as
unemployment rate rises, after a few-year interval, entrepreneurship rate also augments. On the other hand, some
experts indicate an inverse relationship between entrepreneurship and employment, i.e., promotion of entrepreneurial
activities brings down the rate of unemployment.
The current study attempted to investigate the relationship between entrepreneurship-with the concept of creating a
new business- in the industry of Azarbayjan-e-Shargi and unemployment rate in this province. Vector auto-regression
(VAR) econometrics was employed in examining this relationship. The findings indicated that, in industrial sector of
Azarbayjan-e-Shargi, an inverse relationship existed between entrepreneurship and unemployment rate.