Beyond Marshallian Agglomeration Economies: The Roles of Trade Associations in Meiji Japan

Abstract

In both developed Western nations and developing countries, economic growth was based on the development of industrial districts, which were much more organized and institutionalized in modern Japan than economist Alfred Marshall had described. Local trade associations played an important role in enhancing Marshallian externalities, arising from the ease of imitating improved ideas and transacting unfinished products among clustered enterprises by facilitating joint actions in the supply of public goods, such as through the creation of local district brands and through the efficient provision of business information. These activities were clearly beyond the scope of agglomeration economies. This article examines the case of Kiryu, one of the best-known silk weaving districts in Japan.

Honesty, Diligence and Skill: Risk Sharing and Specialization in the Kiryu Silk Weaving Cluster, Japan

“…Thus, manufacturers collectively introduced the knowledge of synthetic dyeing and systematic patterning from the West and openly shared the critical knowledge to extend variety by establishing a technical school, as discussed by Hashino and Kurosawa ().…”

Hand looms, power looms, and changing production organizations: the case of the Kiryū weaving district in early twentieth‐century Japan

“… Changes in the number of out‐weavers and other production organizations in Kiryū, 1901–20 Note: No data are available for 1904 and 1905. Source: Hashino and Kurosawa, ‘Beyond Marshallian agglomeration’, fig. . …”

“… Process of silk fabric production (left) and specialization organization by WMCs (right) in Kiryū around 1910 Source: Hashino and Kurosawa, ‘Beyond Marshallian agglomeration’, fig. .…”

“…Abe, ‘Development of the producing‐centre’; idem, ‘Development of the putting‐out system’; Fujita, ‘Local trade associations’; Hashino and Kurosawa, ‘Beyond Marshallian agglomeration’; Tolliday and Yonemitsu, ‘Microfirms’; Sawai, ‘Role of technical education’; Hashino, ‘Industrial districts’; idem, ‘Importance of consular reports’; idem, ‘Institutionalising technical education’; Arimoto, Nakajima, and Okazaki, ‘Agglomeration or selection?’.…”

“…Responding to a significant increase in the number of dyers, the prefectural government included the dyeing industry in its annual statistical survey after 1915. See Hashino and Kurosawa, ‘Beyond Marshallian agglomeration’, pp. 12–16.…”