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AbstractMany regions across the EU, including the Netherlands, face the challenge of population decline, which entails changing demographics and related social and economic implications. This paper looks into the connection between population change, and population decline in particular, and the rates of new firm formation. Although it is clear that fewer people will eventually lead to fewer (new) firms, we assess whether this negative relationship differs with different rates of population change and across regional contexts. Population decline occurs in different types of regional context, which could also lead to different outcomes. In this study we distinguish between urban and rural areas.In order to establish the impact of population change, and population decline in particular, on entrepreneurship, this paper examines data on population density, size, growth and decline, together with firm dynamics for the period 2003-2009, retrieved from the LISA database. In general, the results show that the relationship between entrepreneurship and population change depends heavily on the regional context. When assessing different levels of population change, we find that its relationship with entrepreneurship depends strongly on the regional context. The results indicate that urban regions tend to experience strong negative impacts as a result of population change, while the impact on rural regions remains positive. In conclusion, we find clear differences in the intensity of the impact of population change on new firm formation according to the type of region. The regional context and the intensity of decline must be taken into account when determining the kind of coping mechanism needed to deal with the consequences of decline.