Selected Issues Papers

Startups and Venture Capital in Japan: How to Grow

By Salih Fendoglu, TengTeng Xu

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 October 10, 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:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Selected Issues Paper No. 2024/027

  • Stock No:

    SIPEA2024027

  • ISBN:

    9798400280610

  • ISSN:

    2958-7875