Business start-ups in Japan: Problems and policies

This paper argues that the comparatively low levels of business start-ups i n Japan need not be a matter of concern in so far as the pattern of growth relying on existing companies persists. But the declining trend of start-li p rates may be worrisome for it may indicate waning entrepreneurship and we akening mechanisms of resource reallocation and economic growth. Policy mea sures to promote business start-ups are not bused on well-founded studies a t an aggregate level, which are lacking in the absence of comparable darn, but rather are inspired by the successful US experience. The paper looks in to two specific areas of policy-private equity markets and bankruptcy-where important progress has been made, and points to further scope for improvem ent.