Considering the Effect of the Revitalization Fund

Abstract

The revitalization fund, which has been founded since around 2001, mainly aims at investing local SMEs and then leading the revitalization of local economies in Japan. This paper first focuses on the money demand aspect and confirms the importance of the profitability of invested SMEs and the discount rate of bank-deteriorated credit transferred to revitalization funds. Utilizing the cases from the Genkidase Osaka Fund, we then confirm that the use of those funds is closely associated with a higher increase in per capita sales and a higher ratio of ending up schemes during that period.