Startups and Venture Capital in Japan: How to Grow

July 1, 2024

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Format: Chicago

Salih Fendoglu, and TengTeng Xu. Startups and Venture Capital in Japan: How to Grow, (USA: International Monetary Fund, 2024) accessed November 21, 2024

Summary

The startup ecosystem in Japan has seen gradual growth, supported by the government’s recent "Startup Development Five-Year Plan" and a significant interest from overseas venture capital. This paper lays out the startup financing ecosystem in Japan, with comparison to international peers, and studies potential drivers of startup financing and their relevance for startups’ performance. The results, based on country-level aggregate analysis, underscore the critical role of firm dynamism and entrepreneurship in supporting capital investment and firm valuations. Further analyses at the firm level suggest that equity funding helps startups innovate, grow, and successfully exit. Moreover, the impact of funding on the likelihood of a successful exit appears to be higher in cultures that seem to reward risk taking.

Subject: Development, Development strategy, Financial markets, Initial public offering, Labor, Self-employment

Keywords: Development strategy, Fiscal transfers, Funding affect startup performance, Global, Helps startup, Inequality, Initial public offering, Labor market duality, Self-employment, Startup ecosystem, Startup financing, TengTeng xu, Wage gap

Publication Details

Pages:

16
Volume:

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DOI:

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Issue:

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Series:

Selected Issues Paper No. 2024/027
Stock No:

SIPEA2024027
ISBN:

9798400280610
ISSN:

2958-7875

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