Institutional Change and Venture Exit : Implications for Policy

We examine the role that changes to the institutional environment play in the formation, exit, and performance of ventures. We do so by taking advantage of two natural experiments in Japan that relates to the exit of a venture: successful IPO, and failure in bankruptcy. In our first study, we examine lowering the “barriers to success” of IPO reform. In our second study, we look at lowering the “barriers to failure” of bankruptcy. We use the empirical context of Japan in an era of reform. While results are preliminary, our work has implications for scholars and policymakers in showing that policies for entrepreneurship should give more import to the quality rather than the quantity of entrepreneurs, and to the second order effects of reforms not just their direct effects