2023 Volume 40 Pages 6-23
This study examines the locomotive supply system that supported the rapid development of Japan’s railway industry at the turn of the 20th century, focusing on technological independence of Japanese mechanical engineers and the export of American-made locomotives to Japan. It demonstrates how American locomotive manufacturers dismantled the British monopoly and penetrated the Japanese market, by paying attention to changes in technological development and business system on the demand side of the railway industry and to roles of international trading companies that mediated the supply of locomotives and rolling stock. In particular, a case study of Frazar & Co., an agency of Baldwin Locomotive Works, is implemented, which investigates cooperation between trading companies and manufacturers in the locomotive industry with regard to marketing activities. Trading companies, such as Frazar & Co., introduced locomotive manufacturers to engineers of railway companies, government officers, and academics in Japan, China, and elsewhere. In emerging markets, research and transaction costs borne by manufacturers and customers were very expensive. Trading companies in emerging countries such as Japan and China had information about the emerging markets and contributed to increasing overall profits by lowering these costs.
