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.

The importance of general trading companies in Japan’s economic development is widely acknowledged, but little is known about their role in the transfer of technology and innovations. We address this issue by examining the emerging aircraft industry in Japan during the 1920s, focusing on its main foreign partner, France, and one of the largest Japanese groups, Mitsubishi. We show that while the French influence in the Japanese market remained unchallenged up to the mid-1920s, it faded away afterward due to the absence of French trading companies on the ground, despite considerable support from the French government. This contrasts with our analysis of the Japanese side. Using its worldwide network, Mitsubishi Trading Co. provided Mitsubishi Motors Co. with appropriate information and contracts with French as well as German companies. It eventually succeeded in creating joint ventures with these close partners. Their early failure in 1926 sparked a shift from importing technology via trade agreements to developing the industry through manufacturing (e.g., creation of Mitsubishi Aircraft Co. in 1928). Thus, Mitsubishi Trading proved to be an efficient early market developer for the Japanese side, whereas French business suffered from not having similar trading companies in Japan and being overdependent on state structures.

This paper asserts that the next challenge for business history research is to clarify, with specific examples, the functions of trading companies in generating export transactions. I address this issue here by clarifying the functions of trading companies employed by American oil companies as they developed their businesses in the emerging high-risk market of Japan and expanded their global business activities during the interwar period. In particular, I examine the trading company functions that Mitsubishi Trading Company (Mitsubishi Shōji Kaisha, MSK) provided to the Associated Oil Company. The paper then focuses on the trade of crude and fuel oil, an often overlooked area of trade in existing studies. Moreover, I explore why Associated Oil and MSK were able to maintain a substantial share of the Japanese market for crude and fuel oil by examining their shift in trading methods from commission to proprietary trading. The paper concludes that one of the reasons for MSK’s success was that it took over the costs and risks that Associated Oil should have borne under their original contract while at the same time delegating to itself, with its greater knowledge of local conditions and information, the discretionary power to enter these transactions.

The role played by one of Japan’s leading trading companies in the overseas expansion of the Japanese automobile industry is the important, if understudied, issue to be examined by the present investigation. How were Japanese manufacturers able to enter key overseas markets, dominated by the more technologically savvy American, British, and European manufacturers? To answer the question, we clarify the role played by the Mitsubishi Trading Company in supporting the Nissan Motor Company in its pioneering export of passenger cars to Australia during the 1930s. We then conclude by considering how these interwar experiences relate to Japan becoming a major source of machinery exports – a key manufacturing nation – that was able to achieve dramatic increases in its light-and heavy-industrial exports to the Americas, Western Europe, and eventually the emerging markets of the Asia-Pacific region in the latter half of the twentieth century.

This paper elucidates the historical conditions behind the development of cooperative activity through the use of a case study in the Japanese sawmill industry, one of the industries that helped drive the country’s rapid postwar economic growth. Past business-history studies on conditions in Europe have shown that products from cooperatives initially struggled to carve out a market share, with large-scale businesses seeing little benefit in joining cooperatives’ ranks, and that cooperatives eventually began to develop when countries rolled out far-reaching subsidy policies after World War II. This paper, however, presents a case in which the leadership of large-scale businesses and the followership of smaller businesses propelled the growth of a cooperative that engaged in collective purchasing and marketing. In the postwar Japanese sawmill industry, it was autonomous corporate coordination, not national subsidy policy, that nurtured cooperative activity. The paper thus adds to the existing scholarship by highlighting a new development pattern for cooperatives.