Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth

63 Pages Posted: 31 May 2007

See all articles by Masao Nakamura

Masao Nakamura

University of British Columbia (UBC) - Sauder School of Business

Randall Morck

University of Alberta - Department of Finance and Statistical Analysis; National Bureau of Economic Research (NBER); European Corporate Governence Institute; Asian Bureau of Finance and Economic Research

Multiple version iconThere are 4 versions of this paper

Date Written: June 2007

Abstract

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.

Keywords: Business Groups, Big push, spillovers, Mass Privatization, Japan

JEL Classification: G3, L22, L52, N65,O2, O53, P11, P12

Suggested Citation

Nakamura, Masao and Morck, Randall K., Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth (June 2007). Available at SSRN: https://ssrn.com/abstract=989883 or http://dx.doi.org/10.2139/ssrn.989883

Masao Nakamura

University of British Columbia (UBC) - Sauder School of Business ( email )

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Randall K. Morck (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

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National Bureau of Economic Research (NBER)

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European Corporate Governence Institute ( email )

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Asian Bureau of Finance and Economic Research ( email )

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Singapore

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