A Comparative Analysis of Biotechnology Startups between Japan and the US

Kazuyuki Motohashi

Social Science Japan Journal, 2012, vol. 15, issue 2, 219-237

Abstract: In this paper, I compare activities in biotech firms in the two countries based on firm-level data in 2004 (443 Japanese firms, 12 of which are listed publicly, and 1,446 US firms, 431 of which are public). First, I found that Japanese firms are much smaller than US firms, even after controlling for firm age and technology field. Furthermore, Japanese firms grow over time, while the size of US firms does not change. These findings suggest that there are some differences in the biotech business models of the two countries. I also found that US firms spend a large amount of R&D particularly in the areas of medical and health, while Japanese firms do not. Therefore, most Japanese firms do not invest a substantial amount of R&D in risky areas but run businesses in low-risk areas, such as providing R&D services. I argue that such differences in startup activities can be explained by differences in the venture capital markets between Japan and the US.

Date: 2012
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