The Profits of the Dutch East India Company's Japan Trade

27 Pages Posted: 15 Mar 2004

See all articles by Kees Camfferman

Kees Camfferman

Free University of Amsterdam

T. E. Cooke

University of Exeter Business School


This article analyses the eighteenth-century accounting practices of the Japanese trading station or factory of the Dutch East India Company (Vereenigde Oost Indische Compagnie or VOC). The factory's trade and its reported profits declined during the eighteenth century, but because of the complexity of the accounting issues involved, contemporaries held different views on whether the accounting data supported a continuation of the factory's operations. For similar reasons, some historians have argued that the maintenance of the factory in the face of declining profits illustrates the poor quality of the VOC's management, while others have argued in favour of the economic viability of the factory. The purpose of this article is to a more comprehensive analysis of the accounting issues facing the Japanese factory present in the eighteenth century than offered to date, in order to propose a way in which the accounting records may be approached as a source of data for historical research. The conclusions are twofold. First, there were three main accounting issues facing the factory that should be considered when interpreting the accounting records. These issues can be summarized as transfer pricing, currency translation and overhead allocation. While all these issues have been recognized in the literature at some stage, they have never been considered in combination. Second, we tentatively conclude that if the recorded accounting figures are adjusted as proposed, they support the view that keeping the factory open was a correct decision from a commercial point of view.

JEL Classification: M41, M42, M44, M46, M47, L29

Suggested Citation

Camfferman, Kees and Cooke, Terry E., The Profits of the Dutch East India Company's Japan Trade. Abacus, Vol. 40, No. 1, pp. 49-75, February 2004. Available at SSRN:

Kees Camfferman (Contact Author)

Free University of Amsterdam ( email )

Amsterdam, ND North Holland

Terry E. Cooke

University of Exeter Business School ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom
+44 1392 263239 (Phone)
+44 1392 263210 (Fax)

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