Startups and Venture Capital in Japan: How to Grow

Selected Issues Papers, July 1, 2024

Source details

Examines the startup financing ecosystem in Japan with comparisons to international peers.
Analyzes potential drivers of startup financing and their relevance for startups’ performance.
Uses both country-level aggregate analysis and further analyses at the firm level.

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.
Country-level aggregate analysis underscores the critical role of firm dynamism and entrepreneurship in supporting capital investment and firm valuations.
Firm-level analyses suggest that equity funding helps startups innovate, grow, and successfully exit.
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

Formats and availability: Web landing page with PDF download option and multiple eLibrary formats noted.

Source: IMF Selected Issues Paper No. 2024/027 (Startups and Venture Capital in Japan: How to Grow), July 1, 2024.