Empirical analysis of the effects of start-up support policy on new firms birth

2003 Fiscal Year Final Research Report Summary

• Project/Area Number: 12630064
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Single-year Grants
• Section: 一般
• Research Field: 経済政策(含経済事情)
• Research Institution: Hokusei Gakuen University (2002-2003); Hokkaido Information University (2000-2001)
• Principal Investigator: MASUDA Tatsuyoshi Hokusei Gakuen University, Economics, Professor, 経済学部, 教授 (70190361)
• Project Period (FY): 2000 – 2003
• Keywords: Latent entrepreneurs / Self-employment / Push hypothesis / Pull hypothesis / Taxation / Start-up support program / プル仮説

Research Abstract

This report examined regional characteristics affecting the latent entrepreneurship in Japan, focusing on regional macro economic indicators, existing density of establishments and human capital, and business start-up assistance programs by local governments. We defined two kinds of persons having the latent entrepreneurship as follows: (1) persons merely wishing to be a self-employed worker; and (2) persons preparing to be a self-employed worker out of the former definition. Total cash earnings and unempolyment rate, which are the macro economic indicators, had positive effects on the latent entrepreneurship. Judging from the significance of their estimations, the latent entrepreneurship is explained by the "Push hypothesis". The density of female workers had a positive effect on the latent entrepreneurship. This finding suggests that they have strong willingness to take the higher risk to be entrepreneur in Japanese society. High density regions of venture business, 25-29 years old, technical workers, managers and officials workers, services workers, and college or university graduates had induced people to wish to be entrepreneur. Business start-up assistance programs, in both financial and management assistances, by local governments were not still sufficient or adequate for people preparing to be self-employed. From these estimated results, we can point out the following policies. The local governments ought to promote start up businesses in high density regions of establishments and human capital. As some effective policy instruments, the government can provide technical education and training to latent entrepreneurs. The government should mitigate financing problems with female workers wanting to be self-employed. And also the government can provide financial assistance to the unemployed who wish to be new firm founders. For further research, it is necessary for us to identify government assistance programs which make the latent entrepreneurs more self-employment.