Abstract: Competition and Cooperation for the Fashion Market: The Development of a Textile District in Japan Supported by the Functions of a Trade Association

Tomoko Hashino and Takafumi Kurosawa

Abstract

This paper analyzes the important roles that trade associations played in the development process of Kiryu, a leading silk textile district in modern Japan. The abolition of the pre-modern guilds by the Meiji Government made industrial districts lose their autonomous dynamics. As a result, quality and free-rider problems rose in most industrial districts. Under such conditions, some districts voluntarily tried to organize regional associations like the former guilds. Their initial activities focused on quality inspections and quality improvement by inviting government officials to give lectures and establishing technical schools. The free-rider problem was gradually resolved by enforcing laws enacted by the central and local governments. The textile districts in modern Japan were no longer "industrial districts" in the Marshallian sense but based on much more organized and regulated relationships. Interestingly, their function changed as they faced different market conditions. When competition was fierce in the 1920s-1930s, trade associations played the role of marketing or sales promotion for their members. In this paper, to clarify some important functions of trade association in industrializing Japan, we find that similar features in the textile districts between Japan and Europe went beyond the cultural differences.