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This paper aims to investigate the stationary properties of entrepreneurship capital in the Iranian business sector. The investigation is conducted based on firm size (micro, small and medium, and large), sector (ISIC classification), and location (23 provinces) over the period 1981–2021.

To achieve the purpose of the paper, we apply the Lagrange Multiplier (LM) unit root test with structural breaks.

The results of our study confirm the stationarity of entrepreneurship for the majority of our categorizations. Therefore, entrepreneurs' willingness to start a business is temporarily affected by sharp shocks, suggesting that the entrepreneurship trends in these categories will eventually revert to their long-run equilibrium. However, the time series of entrepreneurship in provinces such as Zanjan and Lorestan, as well as in the electrical machines and devices (code 31) sector, remain permanent. These findings can assist policymakers in each sector and location in designing effective policies to promote entrepreneurial activities.

In this study, the time period utilized was restricted, and there were no data accessible for an extended duration. Another limitation of this research is the absence of access to firm-level data on a shorter time scale, such as weekly or monthly.

The economic literature reveals that empirical studies on the persistence of entrepreneurship have received relatively less attention in the context of emerging and resource-based economies, compared to the increasing focus on them in developed countries. Therefore, to address this gap, this paper aims to extend the current empirical literature by presenting new evidence for the case of Iran, which has an emerging and resource-based economy.

During recent years, the long-run relationship between the unemployment rate (UR) and the labor force participation (LFP) rate has been examined in-depth in developed and developing economies. This paper aims to explore this relationship for Iranian women in 31 provinces from 2005Q2 to 2019Q1.

To examine the existence of a long-run relationship between female LFP and UR, the time-series cointegration approach has been used. Furthermore, regarding the low power of the univariate cointegration approach, the authors consider a panel version of the cointegration tests developed by Westerlund.

Both time-series cointegration tests and panel cointegration test support the unemployment invariance hypothesis for most Iranian provinces, especially the most religious ones. As it implies an invariance to supply side policies, it seems that reducing legal and cultural barriers could be more relevant to decrease female UR and increase LFP than training programs or R&D policies. The present results also suggest that, for this group of regions, a more centralized policy design could be appropriate, instead of a regional one.

This study investigates whether the unemployment invariance hypothesis holds for Iran, which has not been analyzed before for the Iranian labor market. Moreover, the study adopts a regional approach, which takes into account the huge regional differences in Iran.

During recent years, the nexus between unemployment and entrepreneurship has been examined in depth in developed and industrialised economies but rarely in developing economies. The purpose of this paper is to investigate such a relation in the case of 30 Iranian provinces from 2005Q2 to 2017Q4. Using both the autoregressive distributed lag (ARDL) bounds testing and vector error correction method (VECM) Granger causality approaches, the findings show that a unidirectional short-run causal relationship from entrepreneurship to unemployment and vice versa was observed in 13 and 10 per cent of provinces, respectively. The authors also find evidence for unidirectional long-run causality in 77 per cent of provinces from unemployment to entrepreneurship, as well as 10 per cent of provinces from entrepreneurship to unemployment. Finally, the results confirm that in long-run, the “prosperity-pull” effects are considerably stronger than the “recession-push” effects in Iranian provinces.

The main target of this paper is to investigate the unemployment-entrepreneurship in the case of 30 Iranian provinces from 2005Q2 to 2017Q4 by using ARDL bounds testing and VECM Granger causality approaches.

The results confirm that in long-run, the “prosperity-pull” effects are considerably stronger than the “recession-push” effects in Iranian provinces. This finding reveals that the unemployment rate can be regarded as a critical instrument for hindering entrepreneurial activity by increasing the risk of business bankruptcy and pulling entrepreneurs out of self-employment. All these results must be taken into account in the construction of useful economic policies for the Iranian labour market.

The economic literature reveals that most empirical studies of the nexus between unemployment and entrepreneurship examined developed and industrialised economies and the analysis of such a relation for developing countries has not been considered by researchers. Thus, to fill this gap, this paper extends the current empirical literature by presenting new empirical evidence for the case of Iran, which has a developing economy.