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Entry of Small and Medium Enterprises and Economic Dynamism in Japan

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  • Kawai, Hiroki
  • Urata, Shujiro

Abstract

In examining the evolution of small and medium enterprises in Japan in the postwar period, this paper shows that entry rates for new firms have declined sharply in the last quarter century or so, a trend observed across most sectors of the economy as well as across most firm-size categories. To explain this pattern, the paper investigates the determinants of entry in Japan. Among other factors, it finds that cost disadvantages owing to small scale and the shortage of technical resources are significant deterrents to entry. It also finds that the availability of government-directed credit deters entry which suggests that, in their current form, such credit programs protect incumbents. Among positive factors, it finds that subcontracting opportunities promote entry which suggests that the subcontracting system in Japan is open to newcomers and helps give them a foothold in the economy. Copyright 2002 by Kluwer Academic Publishers

Suggested Citation

  • Kawai, Hiroki & Urata, Shujiro, 2002. "Entry of Small and Medium Enterprises and Economic Dynamism in Japan," Small Business Economics, Springer, vol. 18(1-3), pages 41-51, Feb.- May.
    • Handle: RePEc:kap:sbusec:v:18:y:2002:i:1-3:p:41-51
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    Citations

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    Cited by:

    1. Andre van Stel & Lendert Baljeu & Roy Thurik & Ingrid Verheul, 2006. "The Contribution of Business Ownership in Bringing Down Unemployment in Japan," Papers on Entrepreneurship, Growth and Public Policy 2006-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    2. Thorsten Beck & Asli Demirgüç-Kunt, 2004. "SMEs, Growth, and Poverty," World Bank Publications - Reports 11278, The World Bank Group.
    3. Munseob Lee & Yongseok Shin, 2024. "The plant‐level view of Korea's growth miracle and slowdown," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(3), pages 704-725, August.
    4. Thorsten Beck, 2003. "Small and medium enterprises, growth, and poverty : cross-country evidence," Policy Research Working Paper Series 3178, The World Bank.
    5. Shawn Banasick & Ge Lin & Robert Hanham, 2009. "Deviance Residual Moran's I Test and Its Application to Spatial Clusters of Small Manufacturing Firms in Japan," International Regional Science Review, , vol. 32(1), pages 3-18, January.
    6. Aizhan Tleuberdinova & Zhanat Shayekina & Dinara Salauatova & Stephen Pratt, 2021. "Macro-economic Factors Influencing Tourism Entrepreneurship: The Case of Kazakhstan," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 179-209, March.
    7. Joost van Acht & Joop Stam & Roy Thurik & Ingrid Verheul, 2004. "Business Ownership and Unemployment in Japan," Papers on Entrepreneurship, Growth and Public Policy 2004-09, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    8. Flavio Calvino & Chiara Criscuolo & Kenta Ikeuchi & Carlo Menon, 2017. "Start-up Dynamics In Japan: Comparative Evidence From the Dynemp v.2 Database," The Japanese Economic Review, Japanese Economic Association, vol. 68(2), pages 188-199, June.
    9. Sawako Maruyama, 2013. "The structure and the determinants of the trade of SME products," Discussion Papers 1304, Graduate School of Economics, Kobe University.
    10. Lee, Seung-Hyun & Yamakawa, Yasuhiro & Peng, Mike W. & Barney, Jay B., 2011. "How do bankruptcy laws affect entrepreneurship development around the world?," Journal of Business Venturing, Elsevier, vol. 26(5), pages 505-520, September.
    11. Erkko Autio & Kun Fu, 2015. "Economic and political institutions and entry into formal and informal entrepreneurship," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 67-94, March.
    12. Jonathan Levie & Erkko Autio, 2008. "A theoretical grounding and test of the GEM model," Small Business Economics, Springer, vol. 31(3), pages 235-263, October.
    13. André van Stel & Roy Thurik & Ingrid Verheul & Lendert Baljeu, 2007. "The Relationship between Entrepreneurship and Unemployment in Japan," Tinbergen Institute Discussion Papers 07-080/3, Tinbergen Institute, revised 14 Jul 2008.
    14. Seung-Hyun Lee & Yasuhiro Yamakawa, 2012. "Forgiving Features for Failed Entrepreneurs vs. Cost of Financing inBankruptcies," Management International Review, Springer, vol. 52(1), pages 49-79, February.

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