1 Preliminary comment welcome Do not cite this version without authors’ permission The Effect of Relaxation of Entrance Restriction for Large Scale Retailers on SME’s performance -Evidence from Japanese Retail Census- Ψ Matsuura Toshiyuki 1 Hitotsubashi University and Research Institute of Economy Trade and Industry Sugano Saki Graduate School of University of Tokyo and Research Institute of Economy Trade and Industry Abstract: In this paper, we quantify the effect of relaxation of entry restriction on productivity based on newly development establishment-level data in retailing industry. At first, we quantify the contribution of restructuring and reallocation caused by entry and exit to industry-level productivity growth. Especially we focus on the role of LSR entry. And we also shed light on the effect of LSR entry on SMEs’ performance, and explore how LSR entry has affect small outlets. Ψ This paper is the based on the project “Productivity Enhancement for Service Sector in Japan.” We would like to thank Ministry of Economy, Trade and Industry for providing us the micro level data of Wholesale and Retail Census. 1 Corresponding author: matsuura@ier.hit-u.ac.jp