Title: The profitable new Japanese entrepreneurs: the minor role of information technology

Authors: Tatsuyoshi Masuda

Addresses: Department of Economics, Hokusei Gakuen University, 2–3–1, Oyachi Nishi Atsubetu ku, Sapporo 004–0042, Japan

Abstract: The internet use in daily business operations does not always contribute to making all new entrepreneurs better off. We examine the differential determinants of economic performance between the profitable internet users and the nonprofitable ones, focusing on the managerial ability being endowed on the internet-using new entrepreneur. Empirical results show that the profitable internet users have the managerial abilities of hiring talented employees and of raising the morale of the employees and, in addition, have accumulated their previous work experiences. Meanwhile, the nonprofitable ones have a significantly positive effect only for their previous occupational status. The unexpected demand deficiency and the home office do not contribute to better performance for both types of entrepreneurs. These findings suggest that the new entrepreneur does not succeed merely by the use of the internet. The latent profitable entrepreneurs should be supported on these aspects by the startup assistance policy.

Keywords: new entrepreneurs; internet use; managerial ability; previous work experiences; previous occupational status; talented employees; employee moral; external support agencies; home office; Japan; information technology; entrepreneurship; startup assistance; startups.

DOI: 10.1504/IJESB.2009.021608

International Journal of Entrepreneurship and Small Business, 2009 Vol.7 No.1, pp.24 - 58

Published online: 30 Nov 2008 *

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