Business Ownership and Unemployment in Japan

Tinbergen Institute Discussion Paper No. TI 2004-036/3

25 Pages Posted: 7 Apr 2004  

Roy Thurik

Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

I. Verheul

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Joost van Acht

Hitotsubashi University - Institute of Innovation Research

Joop A. Stam

Erasmus University Rotterdam (EUR) - Department of Economics

Date Written: March 25, 2004

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

JEL Classification: J60, L16, M13, O10, O53

Suggested Citation

Thurik, Roy and Verheul, I. and van Acht, Joost and Stam, Joop A., Business Ownership and Unemployment in Japan (March 25, 2004). Tinbergen Institute Discussion Paper No. TI 2004-036/3. Available at SSRN: https://ssrn.com/abstract=525302 or http://dx.doi.org/10.2139/ssrn.525302

Roy Thurik

Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC) ( email )

3000 DR Rotterdam
Netherlands
+31 10 408 2232 (Phone)
+31 10 408 9146 (Fax)

HOME PAGE: http://www.thurik.com

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

EIM Netherlands - Business and Policy Research

Postbus 7001
2701 AA Zoetermeer
Netherlands
+31 79 341 3634 (Phone)
+31 79 331 3742 (Fax)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Ingrid Verheul (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burgemeester Oudlaan 50
3062 PA Rotterdam, NL 3062 PA
Netherlands
+31 10 4081398 (Phone)
+31 10 4089146 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Joost Van Acht

Hitotsubashi University - Institute of Innovation Research ( email )

2-1 Naka, Kunitachi
Tokyo, 186-8603
Japan

Joop A. Stam

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Paper statistics

Downloads
115
Rank
197,802
Abstract Views
1,789