Use of plant level micro-data for SME innovation policy evaluation in Japan

[Abstract] Japan's SME policy has reached a major turning point. That is, traditional 'lifting up SMEs as a whole' type policy has been revised toward pro-competition policy to induce entrepreneurship and innovation in SMEs. In this paper, this policy direction and new innovation promotion schemes initiated by METI are evaluated by using plant-level micro data. Census of Manufacturing base longitudinal micro-data are linked with the list of firms participating in SME innovation policy scheme under the Law on Creative Activities in SMEs and the Law on Supporting Business Innovation in SMEs. Plant level pattern on industrial dynamics suggests both policies for new business start-up and innovation creation in existing firm are important. In addition, positive effects on sale growth by participating in a program of the Creative Activity Laws are observed. ([email protected]). Views expressed in this paper are the author's and do not necessarily reflect those of his organizations.