Does Law Matter to Financial Capitalism? The Case of Japanese Entrepreneurs

The biggest difference in the incentive bargains made in the venture capital industries in the US and Japan is that American entrepreneurs abandon control while Japanese entrepreneurs do not. Years ago, this difference was thought to be caused by a lack of liquid IPO markets by some experts in the field. However, there are currently multiple liquid IPO markets in Japan, yet Japanese entrepreneurs are still reluctant to abandon control of their companies to venture capitalists. While there are likely to be many complementary reasons for this difference, it can be partly explained by the different legal systems in the two countries