Abstract
In the industrial agglomeration area where there are numerous potential trading partners, it is thought that a company can adjust itself to various economic conditions by coordinating business relationships. After the 1990s, the superiority of industrial agglomeration areas was recognized anew in economic geography. “The importance of forming new interfirm linkages with new companies” has been cited as a key point of view. However, the formation process of such linkages has not been elucidated. To highlight this process, small and medium-sized companies in Itabashi, Tokyo Metropolis, were researched.
The most important means of forming new Interfirm linkages is “an introduction by an acquaintance.” (In the following, those acquaintances are called “introducers”). Surveyed companies collect information on a new company through the introducer. As a result, they reduce the transaction costs and technical and monetary risks of new business. Surveyed companies and introducers have close business connections in many cases. Introducers of new customers tend to be current customers of the company in question. On the other hand, introducers of new subcontractors tend to be current subcontractors and suppliers. There are many cases in which a surveyed company and the introducer are in the same cooperative society or have subcontracting friends or private acquaintances in common. This means that there is a relationship of mutual trust between both.
Trust is built because of opportunities to learn about each other's technology and personality by joining the same organization such as a cooperative society or a small and medium-sized company group. Linkages to former business partners often lead to the formation of new business relationships. Therefore, historically formed interfirm relationships greatly influence the formation of new interfirm linkages. Trust among firms is formed by participating in the same group, and close relationships are constructed within the group. However, it is difficult to develop ties with companies outside the group. Forming connections among enterprises beyond each group is a key in developing an industrial area.
