The Role of Government-Affiliated Financial Institutions in the Startup Period (Japanese)

This study seeks to clarify the role of government-affiliated financial institutions in business startups through quantitative analysis based on microdata from a questionnaire targeting small and medium-sized enterprises (SMEs). The study aims to examine two points: the complementary relationship between government-affiliated and private sector financial institutions and the effectiveness of direct lending by government-affiliated institutions. The probit model is used to analyze the first point. As a result, it has been confirmed that government-affiliated financial institutions primarily lend to companies that cannot borrow from private sector financial institutions. Specifically, the study verifies that, compared to private sector financial institutions, a high proportion of government-affiliated financial institutions' lending tends to be to entrepreneurs who have fewer assets and less collateral as well as little business experience. The complementary relationship with private sector financial institutions is also verified in terms of regional attributes and attributes relating to the macroeconomic environment, thus with respect to startups government-affiliated financial institutions cannot be seen as competing with their private sector counterparts. The second point is analyzed using OLS and IV with the employment growth rate as the dependent variable. As a result, it has been verified that the crossover points are significantly positive for operating variables taking account of the endogeny of the public sector borrowing dummy and the public sector borrowing dummy x number of years since establishment (logarithm). This suggests the possibility that companies borrowing solely from government-affiliated financial institutions grow gradually in accordance with the number of years since their establishment.