Abstract

"Economic Efficiency or Public Good: Collaborative Attempts to Deal with the 1970s Wastewater Pollution in the Kyoto Black Dyeing Industry"

Muwei Chen, Beijing Foreign Studies University (chen.muwei.63a@bfsu.edu.cn)

The institutional structure of industrial district shapes while constrains the decision-making process of private firms. The structure of an industrial district characterized by flexible specialization is a matrix. On one hand, trade association acts as an organizational guarantee for the counterpart firms to collaborate. On the other, the wholesalers and big weaving firms form a vertical business linkage between SMEs specialized in different processes. This paper proposes and examines this theoretical model by inspecting a pollution problem that occurred in a traditional black dyeing industrial district in Kyoto city (Kyo-kurozome) during the 1970s. Two reasons make this study typical and significant. First, not only pollution problem forced the SMEs to make a decision between public good and economic efficiency, the inability of individual firms also called for the trade associations to initiate collaborative attempts. Second, the 1970s also signifies the enlarging influence of globalization, thus the original institutional structure has undergone some fundamental changes. In this study, the final decision of most firms were to install purifiers, which means they chose public good but rejected technological innovation. This decision making is a reflection of the collaborative attempts by the trade association, which were conditioned by the institutional change during the 1970s.