Business groups and the big push
Subtitle: Meiji Japan's mass privatization and subsequent growth
By: Randall Morck, Masao Nakamura.
Contributors: Nakamura, Masao, Ph. D.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13171.; Working paper series (National Bureau of Economic Research) -- working paper no. 13171.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 62
Subjects: Business networks -- Japan; Family corporations -- Japan; Holding companies -- Japan; Corporations, Japanese
Description: Rosenstein-Rodan (1943) and others posit that rapid development requires a 'big push' -- the coordinated rapid growth of diverse complementary industries, and suggests a role for government in providing such coordination. We argue that Japan's zaibatsu, or pyramidal business groups, provided this coordination after the Meiji government failed at the task. We propose that pyramidal business groups are private sector mechanisms for coordinating and financing 'big push' growth, and that unique historical circumstances aided their success in prewar Japan. Specifically, Japan uniquely marginalized its feudal elite; withdrew its hand with a propitious mass privatization that rallied the private sector; marginalized an otherwise entrenched first generation of wealthy industrialists; and remained open to foreign trade and capital.
Notes: "June 2007"

Includes bibliographical references (p. 45-54).

Also available in PDF from the NBER World Wide Web site (www.nber.org).