Abstract: Business Networks in Japanese Industry in the Late Meiji Era

Yoichi Kobayakawa, William Lazonick, Tsuneo Suzuki, and Kazuo Wada

Abstract

At the beginning of the Meiji Era (1868-1912), Japan had virtually no modern industry. By the end of the period, it had already become an innovator in industries as diverse as shipbuilding and cotton textiles. Central to this transformation were the formation and growth of large numbers of industrial enterprises that, initially borrowing technology from abroad, subsequently improved on these technologies at home. The "indigenous innovation" process depended on the collective capabilities of well-educated and well-trained employees who occupied a wide range of administrative and technical positions in these industrial enterprises. What types of people undertook the investment strategies that drove this industrial transformation, and how did they finance the process? We ask whether and to what extent there was an identifiable group of people who interacted in the formation and growth of industrial firms, and if so who these people were, where they were based, and what were their backgrounds. Based on the National Directory of Corporate Executives, published annually from 1894, three of the authors of this paper have developed extensive databases for 1898 and 1907 of the directors of Japanese companies. This paper presents some preliminary findings; it also evaluates the way in which two other scholars have recently made use of the 1898 database for analyzing the governance of industrial firms in the Meiji Era. We reiterate our argument that there is a need for research that focuses on the types of people who controlled firm strategy, the sources from which they secured committed finance, and the implications of the interaction of strategic control and financial commitment for firm organization and performance.