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Honesty, Diligence, and Skill: Risk Sharing and Specialization in the Kiryu Silk Weaving Cluster, Japan

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Author Info

  • NAKABAYASHI, Masaki

    ()
    (Institute of Social Science, The University of Tokyo)

Abstract

Industrial clusters and factory industries co-develop during industrialization and the relational contracts between manufacturers and subcontractors are the organizational basis of clusters. We predict that relational transactions between manufacturers and subcontractors and cooperative action between manufacturers within a cluster help motivate riskaverse premium subcontractors by reducing risk, not only potentially punish cheaters. We study Kiryu, a kimono weaving cluster that expanded from the late 19th century along with new synthetic dyeing techniques. We show that premium subcontracting weavers were allowed long-term relational contracts and specialization, which induced already honest weavers to be diligent and to acquire skills.

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Bibliographic Info

Paper provided by Institute of Social Science, The University of Tokyo in its series ISS Discussion Paper Series (series F) with number f166.

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Length: 26 pages
Date of creation: 23 Dec 2013
Date of revision: 03 Jun 2014
Handle: RePEc:itk:issdps:f166

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Related research

Keywords: industrial clusters; relational contracts; putting-out system; risk sharing; textile industry; Japan;

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  1. Vu Hoang Nam & Tetsushi Sonobe & Keijiro Otsuka, 2010. "An Inquiry into the Development Process of Village Industries: The Case of a Knitwear Cluster in Northern Vietnam," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 46(2), pages 312-330.
  2. Gebreeyesus, Mulu & Mohnen, Pierre, 2011. "Innovation performance and embeddedness in networks: evidence from the Ethiopian footwear cluster," MERIT Working Papers 043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. yamamura, eiji, 2008. "Dynamics of social trust and human capital in the learning process: The case of the Japan garment cluster in the period 1968-2005," MPRA Paper 10251, University Library of Munich, Germany.
  4. Tetsuji Okazaki & Masaki Nakabayashi, 2004. ""History of Production Organizations"(in Japanese)," CIRJE J-Series, CIRJE, Faculty of Economics, University of Tokyo CIRJE-J-120, CIRJE, Faculty of Economics, University of Tokyo.
  5. Luigi Guiso & Fabiano Schivardi, 2007. "Spillovers in Industrial Districts," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(516), pages 68-93, 01.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The modular kimono
    by Dick Langlois in Organizations and Markets on 2014-01-14 17:50:39

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