Entry of small and medium enterprises and economic dynamism in Japan

Hiroki Kawai, Shujiro Urata

Research output: Contribution to journalArticle

25 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)41-51
Number of pages11
JournalSmall Business Economics
Volume18
Issue number1-3
DOIs
Publication statusPublished - 2002 Dec 1

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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