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SME Policy, Financial Structure and Firm Growth: Evidence From Japan

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Abstract

This paper investigates the effects of public policy and financial structure on the growth of small and medium enterprises (SMEs). Using a panel data set on SMEs in the Japanese manufacturing industry, we examine whether or not the SME Creative Business Promotion Law (CBPL) and financial structure affect firm growth. It is found that SMEs approved by prefectural governors under this law tend to increase assets. Further, we provide evidence that the CBPL and cash flow have an impact on the growth of younger SMEs.

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Authors and Affiliations

  1. Faculty of Commerce, Chuo University, 742-1 Higashinakano, Hachioji, Tokyo, 192-0393, Japan

    Yuji Honjo

  2. Graduate School of Systems and Information Engineering, University of Tsukuba, 1-1-1 Tennodai, Tsukuba, Ibaraki, 305-8573, Japan

    Nobuyuki Harada

Authors
  1. Yuji Honjo
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  2. Nobuyuki Harada
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Correspondence to Yuji Honjo.

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Honjo, Y., Harada, N. SME Policy, Financial Structure and Firm Growth: Evidence From Japan. Small Bus Econ 27, 289–300 (2006). https://doi.org/10.1007/s11187-005-6703-0

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