Government Influence and the Lifecycle Development of Impact Investing Ecosystems: The Role of the Japanese Government in Comparative Perspective

Abstract Book of the 10th International Conference on Applied Research in Business, Management and Economics

Year: 2026

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Government Influence and the Lifecycle Development of Impact Investing Ecosystems: The Role of the Japanese Government in Comparative Perspective

Junjiro Makise, Ralph Martinez

ABSTRACT:

This study examines how government roles influence the maturity of impact investing ecosystems, with a particular focus on Japan and comparative benchmarks from the United States, Canada, and the United Kingdom. Drawing on policy documents, institutional reports, and sustainability-oriented investment data, the research maps the chronological evolution of key laws, regulations, and policy initiatives across these regions. Due to limited and fragmented data on impact investing market size, ESG and responsible investment metrics are employed as a proxy, given their overlapping objectives, shared investor base, and common regulatory environment. The analysis applies Roundy’s (2019) ecosystem framework—diversity, coherence, and coordination—and Carlsson’s (2016) industry lifecycle model to assess how policy trajectories correspond to ecosystem development stages. Findings indicate that the United States exhibits a layered, decentralized policy accumulation supported by sustained public participation (e.g., though SBA), while Canada demonstrates a state-led catalytic model driven by public investment institutions, and the United Kingdom emphasizes governance, stewardship, and capital recycling mechanisms. Positioned at a post-entry yet pre-growth stage, Japan reflects elements of both the Canadian and UK models, characterized by a facilitation-driven and progressively formalizing ecosystem. However, Japan’s ecosystem currently exhibits limited diversity, with investment activity concentrated among large financial institutions, while maintaining relatively strong coherence and coordination through aligned policy direction and institutional participation. This positioning suggests that advancing toward a growth phase will require expanding investor diversity, strengthen financing mechanisms, and enhance governance to support broader market participation and sustained scaling.

Keywords: ESG Investing; Government Policy; Impact Investing; Investment Ecosystem; Sustainable Finance