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Firm Size and Business Startup Reasons of Japanese Workers

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  • TSUCHIYA Ryuichiro
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    Abstract

    Small firms are more likely to produce entrepreneurs than large firms. This study empirically examines a potential mechanism that might explain this phenomenon, observed in previous research, using Japanese survey data of employees planning to start businesses. The data contain information on employer, job, and personal characteristics and also indicates the reasons for starting the businesses. The results from a principal component analysis of various startup reasons identify four separate component factors that account for 70 percent of variance: a need for self-fulfillment, a need for flexibility in work schedule, a need to solve a career problem, and a need to secure a livelihood. I empirically examine the relationship between rating scores for these factors and the size of employers. The results from multivariate regression models indicate that the score for a need to solve a career problem was significantly higher for those working for small firms, while none of the other three factors are significantly different between employees of large and small firms. In addition, the results also suggest that the relationship between the need to solve a career problem and employment of small firms is associated with the tendency for middle managers. The implications of these findings for researchers and policy-makers are discussed.

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    Bibliographic Info

    Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 10012.

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    Length: 30 pages
    Date of creation: Mar 2010
    Date of revision:
    Handle: RePEc:eti:dpaper:10012

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