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Small Business Economics

, Volume 18, Issue 1–3, pp 41–51 | Cite as

Entry of Small and Medium Enterprises and Economic Dynamism in Japan

  • Hiroki Kawai
  • Shujiro Urata
Article

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.

Keywords

Japan Industrial Organization Current Form Positive Factor Medium Enterprise 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • Hiroki Kawai
    • 1
  • Shujiro Urata
    • 2
  1. 1.Faculty of EconomicsKeio UniversityMinato-ku, TokyoJapan
  2. 2.Waseda UniversityTokyoJapan

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