Executive forum: Japan's 'credit crunch' and its consequences for venture finance

Author: Nishizawa A.

Source: Venture Capital: An International Journal of Entrepreneurial Finance, Volume 1, Number 3, 1 July 1999 , pp. 275-284(10)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This paper has three objectives. First, it describes the effects of the Japanese financial crisis ('credit crunch') on the small firm sector of the economy. Second, it explains why alternative sources of equity finance for new ventures have not emerged. Third, the paper outlines some policies that have been introduced recently to assist start-up ventures in Japan. One of the most important policies is that of facilitating risk capital through equity for start-up ventures to revive the Japanese economy from the current severe recession. The Ministry of International Trade and Industry (MITI) is trying to use every possible means, from nurturing business angels to restructuring the over-the-counter (OTC) market. Nevertheless there are strong concerns that the policies need a long time to take effect in Japan due to a lack of investors with enough experiences to invest in start-up ventures.

Keywords: CREDIT; CRUNCH; VENTURE; CAPITAL; BUSINESS; ANGELS; TECHNOLOGY; TRANSFER

Language: English

Document Type: Research article

Publication date: 1999-07-01

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