Does user entrepreneurship matter for start-up financing? Evidence from Japan

Chong Yu () and Masatoshi Kato
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Chong Yu: Graduate School of Business Administration, Kwansei Gakuin University

No 275, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This study explores whether firms founded by user entrepreneurs have an advantage in raising external capital at start-up, distinguishing between end-user and professional user entrepreneurs. Drawing on the concept of user entrepreneurship in combination with the resource-based view of the firm, we argue that being user entrepreneurs serves as a positive signal to external providers of capital under information asymmetry. Using data based on original questionnaire survey for start-ups in Japan, it is shown that firms founded by user entrepreneurs, especially professional user entrepreneurs, are more likely to raise external capital at start-up. Furthermore, the advantage of user entrepreneurs is found to be more pronounced in firms that engaged in business-to-consumer (B2C) than in business-to-business (B2B).

Keywords: User entrepreneur; end-users; professional users; resource-based view; B2C (search for similar items in EconPapers)
JEL-codes: G30 L26 M13 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2024-08
New Economics Papers: this item is included in nep-cfn, nep-cse, nep-ent, nep-pay and nep-sbm
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