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A strategic behavior analysis of why ventures are risky for young people in Japan but not in Silicon Valley

Dimitry Rtischev

Journal of the Japanese and International Economies, 2017, vol. 44, issue C, 78-89

Abstract: The phenomenon of young people (under 30) starting or working in ventures is common in Silicon Valley but rare in Japan. Avoiding cultural attributions upon which many international comparisons of entrepreneurship are truncated, we apply strategic behavior theory to uncover a rational-choice basis for this phenomenon. We identify individual and organizational players, consider their strategies, and compare equilibria in the institutional context of Japan and the US. We pay close attention to how competition in Japanese educational, labor, and marriage markets differs from such competition in the US to identify factors which raise the career attraction of big firms and thereby fuel adverse selection that hurts ventures. Our conclusions challenge the stereotype that the founders and employees of Silicon Valley ventures are heroic risk-takers whereas the Japanese are much more risk-averse.

Keywords: Ventures; Entrepreneurship; Japan; Silicon Valley; Innovation; IT industry (search for similar items in EconPapers)
JEL-codes: L26 J24 M51 I21 D02 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.jjie.2017.03.003

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