Business Ownership and Unemployment in Japan

Joost van Acht, Joop Stam, Roy Thurik and Ingrid Verheul
Additional contact information
Joost van Acht: Institute of Innovation Research, Hitotsubashi University, Tokyo, Japan
Joop Stam: Erasmus Universiteit Rotterdam
Ingrid Verheul: EIM Business and Policy Research, Zoetermeer, The Netherlands

No 04-036/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: The influence of industrial structure, more specifically of business ownership, is investigated on the level of unemployment in Japan. The question is to what extent business ownership, i.e., entrepreneurship, can reduce the level of unemployment. It will be concluded that Japan is hardly an outlier when using a simple model of the relationship between unemployment and the rate of business ownership. The model is calibrated using recent data of 23 OECD countries. It shows a minor underestimation of the rise in unemployment in Japan in the period 1984-2002. Arguments are brought forward why this might be the case. We argue that small firms in Japan have benefitted in the past from the protective environment of the keiretsu structure. In the current process of industrial restructuring, keiretsu support is dissipating, but has not yet been adequatly replaced with a market environment conducive to the establishment and growth of entrepreneurial firms. The underestimation of the rise in unemployment is a reflection of the limited access of small firms to the market in Japan.

Keywords: Entrepreneurship; business ownership; unemployment; industrial structure; Japan (search for similar items in EconPapers)
JEL-codes: J60 L16 M13 O10 O53 (search for similar items in EconPapers)
Date: 2004-03-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Business Ownership and Unemployment in Japan (2004)
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