要旨：This study analyzes how local agglomeration affects the probabilities of firm entry and exit by focusing on single-establishment firms in the service sector. Firms in the service sector face geographically localized markets since service is generally non-tradable. A theoretical prediction in the literature is that firm turnover is increasing in market size, which is empirically tested in this paper. A novelty of this study is to identify geographic ranges of local agglomeration with geocoding of firm location and micro-geographic data. This study finds that probability of firm entry and exit in the service sector is largely affected by agglomeration factors localized within a 3km radius from their locations.