Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-23T06:51:26.923Z Has data issue: false hasContentIssue false

Finance and industrial development: evolution to market control. Part II: Japan and Germany1

Published online by Cambridge University Press:  12 September 2008

William Lazonick
Affiliation:
University of Massachusetts Lowell, University of Tokyo and INSEAD
Mary O'sullivan
Affiliation:
INSEAD

Abstract

Image of the first page of this content. For PDF version, please use the ‘Save PDF’ preceeding this image.'
Type
Articles
Copyright
Copyright © European Association for Banking and Financial History 1997

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

2 Finance and industrial development. Part I: the United States and the United Kingdom’, Financial History Review, 4, 1 (1997), pp. 729.Google Scholar

3 Smith, T., Political Change and Industrial Development in Japan (Stanford, 1955).Google Scholar

4 Morikawa, H., Zaibatsu (Tokyo, 1992), ch. 1.Google Scholar

5 ibid., p. 59.

6 Nakagawa, K., ‘The “learning industrial revolution” and business management’, in Yui, T. and Nakagawa, K. (eds), Japanese Management in Historical Perspective (Tokyo, 1989), pp. 125.Google Scholar

7 Hirschmeier, J., The Origins of Entrepreneurship in Meiji Japan (Cambridge, 1964), p. 158CrossRefGoogle Scholar; Yonekawa, S., ‘Flotation booms in the cotton spinning industry, 1870–1890’, Business History Review, 61 (1987)CrossRefGoogle Scholar; Ishii, K., ‘Japan’, in Cameron, R. and Bovykin, V. (eds), International Banking, 1870–1914 (New York, 1991), PP. 223–6Google Scholar; Roberts, J., Mitsui (New York, 1973), pp. 118, 122Google Scholar; and Hirschmeier, J. and Yui, T., The Development of Japanese Business (London, 2nd ed, 1981), pp. 112–13.Google Scholar

8 Fraser, A., ‘Hachisuka Mochiaka (1846–1918)’, in Yui, and Nakagawa, , Japanese ManagementGoogle Scholar; and Sakurai, K., Financial Aspects of the Economic Development of Japan, 1868–1958 (Tokyo, 1964), p. 25.Google Scholar

9 Hirschmeier, and Yui, , Development of Japanese Business, p. 112.Google Scholar

10 Sakurai, , Financial Aspects, pp. 31, 116, 132–3.Google Scholar

11 Morikawa, , Zaibatsu, p. 10.Google Scholar

12 Japan Business History Institute, The Mitsui Bank (Tokyo, 1976), p. 67Google Scholar; and Sakurai, , Financial Aspects, p. 51.Google Scholar

13 Tamaki, N., Japanese Banking (Cambridge, 1995), pp. 67, 79, 116CrossRefGoogle Scholar; and Sakurai, , Financial Aspects, p. 282.Google Scholar

14 Adams, T., Japanese Securities Markets (Tokyo, 1953), p. 29Google Scholar; and Tamaki, , Japanese Banking, p. 136.Google Scholar

15 ibid., ch. 1 and p. 108.

16 Morikawa, , Zaibatsu, pp. 79, 96, 161–9Google Scholar; and Sakurai, , Financial Aspects, p. 58.Google Scholar

17 Tamaki, , Japanese Banking, pp. 98–9, 101, 122–3, 145–6Google Scholar; and Teranishi, J., ‘Financial sector reform after the war’, in Teranishi, J. and Kosai, Y. (eds), The Japanese Experience of Economic Reforms (Houndmills, 1993), pp. 160–1.CrossRefGoogle Scholar

18 Teranishi, , ‘Financial sector reform’, p. 134Google Scholar; and Goldsmith, R., The Financial Development of Japan, 1868–1977 (New Haven, 1983), pp. 86–7.CrossRefGoogle Scholar

19 ibid., pp. 161, 193–4.

20 Morikawa, , Zaibatsu, p. 119 and ch. 5.Google Scholar

21 Hirschmeier, , Origins of Entrepreneurship, pp. 188–9Google Scholar; and Abe, E., ‘Shibusawa, Eiichi (1840–1931)’, in Warner, M. (ed.), International Encyclopedia of Business and Management (London, 1996).Google Scholar

22 Morikawa, , Zaibatsu, pp. 62–3Google Scholar; Hirschmeier, and Yui, , Development of Japanese Business, p. 106Google Scholar; and Nakagawa, , ‘Learning industrial revolution’, pp. 23.Google Scholar

23 Yonekawa, S., ‘University graduates in Japanese enterprises before the Second World War’, Business History, 26 (1984)CrossRefGoogle Scholar; Iwauchi, R., ‘The growth of white-collar employment in relation to the educational system’Google Scholar, and Uchida, H., ‘Comment’Google Scholar, both in Yui, and Nakagawa, , Japanese ManagementGoogle Scholar; and Hirschmeier, and Yui, , Development of Japanese Business, pp. 154, 166.Google Scholar

24 Morikawa, H., ‘The increasing power of salaried managers in Japan's large corporations’, in Wray, W. (ed.), Managing Industrial Enterprise (Cambridge, 1989)Google Scholar; and Morikawa, , Zaibatsu, pp. 218–19.Google Scholar

25 Hirschmeier, and Yui, , Development of Japanese Business, p. 154.Google Scholar

26 Adams, T. and Hoshii, I., A Financial History of the New Japan (Tokyo, 1972), pp. 23–5Google Scholar; Bisson, T., Zaibatsu Dissolution in Japan (Westport, 1976)Google Scholar; and Hadley, E., Antitrust in Japan (Berkeley, 1970).Google Scholar

27 Adams, and Hoshii, , Financial History, p. 25.Google Scholar

28 ibid., p. 26.

29 Morikawa, H., ‘Japan: increasing organizational capabilities of large industrial enterprises, 1880s–1980s’, in Chandler, A., Amatori, F. and Hikino, T. (eds), Big Business and the Wealth of Nations (Cambridge, 1997).Google Scholar

30 Kosai, Y., The Era of High-Speed Growth (Tokyo, 1986), p. 26.Google Scholar

31 Moore, J., Japanese Workers and the Struggle for Power, 1945–1947 (Madison, 1983)Google Scholar; Gordon, A., The Evolution of Labor Relations in Japan (Cambridge, 1985), pt 3CrossRefGoogle Scholar; Hiwatari, N., Japanese corporate governance reexamined, paper prepared for Conference on Employees and Corporate Governance,Columbia University Law School,22 Nov. 1996Google Scholar; and Cusumano, M., The Japanese Automobile Industry (Cambridge, 1985).CrossRefGoogle Scholar

32 Shimokawa, K., The Japanese Automobile Industry (London, 1994), ch. 3.Google Scholar

33 Lazonick, W., ‘Cooperative employment relations in manufacturing and Japanese economic growth’, in Schor, J. and You, J. -I. (eds), Capital, the State, and Labour (Aldershot, 1995).Google Scholar

34 Mitsubishi Economic Research Institute, Mitsni-Mitsubishi-Sumitomo (Tokyo, 1955), p. 17Google Scholar; Hadley, , Antitrust, ch. 1Google Scholar; and Morikawa, , ‘Increasing organizational capabilities’.Google Scholar

35 Hodder, J. and Tschoegl, A., ‘Corporate finance in Japan’, in Takagi, S. (ed.), Japanese Capital Markets (Oxford, 1993), p. 150.Google Scholar

36 ibid., p. 154; Japan Securities Research Institute, Securities Markets in Japan, 1986 (Tokyo, 1986), ch. 2Google Scholar; and idem, Securities Markets in Japan, 1996 (Tokyo, 1996), p. 43.Google Scholar

37 Tokyo Stock Exchange, Fact Book, 1996 (Tokyo, 1996), p. 108.Google Scholar

38 Aoki, M., Patrick, H. and Sheard, P., ‘The Japanese main bank system’, in Aoki, M. and Patrick, H. (eds), The Japanese Main Bank System (Oxford, 1994), p. 37Google Scholar; and Hodder, and Tschoegl, , ‘Corporate finance’, p. 134.Google Scholar

39 Suzuki, Y. (ed.), The Japanese Financial System (Oxford, 1987).Google Scholar

40 Riesser, J., The German Great Banks (Washington, 1931 edn), p. 266Google Scholar; and Whale, P. Barrett, Joint-Stock Banking in Germany (London, 1930), pp. 37–8.Google Scholar

41 Eistert, E. and Ringel, J., ‘Die Finanzierung des Wirtschaftlichen Wachstums durch die Banken’, in Hoffmann, W. (ed.), Untersuchungen zum Wachstum der deutschen Wirtschaft (Tübingen, 1971), p. 156.Google Scholar

42 Riesser, , German Great Banks, p. 368Google Scholar; Whale, Barrett, Joint-Stock Banking, pp. 3752Google Scholar; and Pohl, H., ‘Forms and phases of industry finance up to the Second World War’, German Yearbook of Business History (1984), pp. 80–1.Google Scholar

43 Whale, Barrett, Joint-Stock Banking, pp. 446–8Google Scholar; Feldenkirchen, W., ‘Banking and economic growth’, in Lee, W. (ed.), German Industry and German Industrialisation (London, 1991), p. 131Google Scholar; and Tilly, R., ‘An overview on the role of the large German banks up to 1914’, in Cassis, Y. (ed.), Finance and Financiers in European history, 1880–1960 (Cambridge, 1992), p. 104.Google Scholar

44 Pohl, , ‘Forms and phases’Google Scholar; Feldenkirchen, , ‘Banking and economic growth’Google Scholar; idem, ‘The banks and the steel industry in the Ruhr’, German Yearbook of Business History (1981)Google Scholar; idem, ‘Capital raised and its use by mechanical engineering firms in the nineteenth and early twentieth centuries’, German Yearbook of Business History (1983)Google Scholar; idem, ‘Zur Finanzierung von Grossunternehmen in der chemischen und elektrotechnischen Industrie Deutschlands vor dem Ersten Weltkrieg’, in Tilly, R. (ed.), Beitrage zur quantitativen vergleichenden Untemehmensgeschichte (Stuttgart, 1985)Google Scholar; Hoffmann, W. G., Grumbach, F. and Hesse, H., Das Wachstum der deutschen Wirtschaft seit der Mitte des 19 Jahrunderts (Berlin, 1965), p. 273Google Scholar; Rettig, R., Investitions- und Finanzierungsverhalten deutscher Grossunternehmen, 1880–1911, Ph. D. thesis (University of Munster, 1978)Google Scholar; Tilly, R., ‘German banking, 1850–1914’, Journal of European Economic History, 15 (1986)Google Scholar; and Wellhöner, V., Grossbanken und Grossindustrie im Kaiserreich (Gottingen, 1989).CrossRefGoogle Scholar

45 ibid., pp. 97, 107, 121, 125–34; 155–7, 171–3, 217; and Feldenkirchen, , ‘Banking and economic growth’, pp. 126–7.Google Scholar

46 Kocka, J., ‘Family and bureaucracy in German industrial management’, Business History Review, 45 (1971), pp. 147–8Google Scholar; Gall, L., Feldman, G., James, H., Holtfrerich, C.-L. and Buschgen, H., The Deutsche Bank, 1870–1995 (London, 1995), pp. 3745Google Scholar; and Edwards, J. and Ogilvie, S., ‘Universal banks and German industrialisation’, Economic History Review, 49 (1996), pp. 439–40.CrossRefGoogle Scholar

47 Feldenkirchen, , ‘Banking and economic growth’, p. 128.Google Scholar

48 Riesser, , German Great Banks, pp. 334–6, 359–63, 465.Google Scholar

49 ibid., pp. 5–6, 368; and Whale, Barrett, Joint-Stock Banking, p. 121.Google Scholar

50 Riesser, , German Great Banks, pp. 247, 356.Google Scholar

51 ibid., pp. 9–10, 608.

52 Hoffmann, W., ‘Die unverteilten Gewinne der Kapitalgesellschaften in Deutschland, 1871–1957’, Zeitschrift für die gesamte Staatswissenschaft, 115 (1959)Google Scholar; and Pohl, , ‘Forms and phases’, p. 81.Google Scholar

53 Riesser, , German Great Banks, pp. 608–11Google Scholar; and Whale, Barrett, Joint-Stock Banking, p. 54.Google Scholar

54 Riesser, , German Great Banks, pp. 324, 618–22.Google Scholar

55 Hilferding, R., Finance Capital (London, 1981), pp. 107–50Google Scholar; Riesser, , German Great Banks, pp. 370, 618–22Google Scholar; Tilly, R., ‘Mergers, external growth, and finance in the development of large-scale enterprise in Germany, 1880–1913’, Journal of Economic History, 42 (1982)CrossRefGoogle Scholar; and Reich, N., ‘Auswirkungen der deutschen Aktienrechtsform von 1884 auf die Konzentration der deutschen Wirtschaft’, in Kocka, J. and Horn, N. (eds), Recht und Entwicklung der Grossuntemehmen im 19. und frühen 20. Jahrhundert (Gottingen, 1979).Google Scholar

56 Kocka, J., ‘The rise of the modern industrial enterprise in Germany’, in Chandler, A. and Herman, Daems (eds), Managerial Hierarchies (Cambridge, 1980), p. 92Google Scholar; idem, ‘Entrepreneurs and managers in German industrialisation’, in Mathias, P. and Postan, M. (eds), Cambridge Economic History of Europe, 7, pt 1 (Cambridge, 1973)Google Scholar; and Whale, Barrett, Joint-Stock Banking, pp. 5565.Google Scholar

57 ibid., pp. 55–7; Edwards, and Ogilvie, , ‘Universal banks’, p. 440Google Scholar; Feldenkirchen, , ‘Banking and economic growth’, p. 133Google Scholar; Kocka, , ‘Rise of modern industrial enterprise’, pp. 8998Google Scholar; Pohl, , ‘Forms and phases’, p. 82Google Scholar; and Wellhöner, , Grossbanken, pp. 236–47.Google Scholar

58 Brockstedt, J., ‘Family enterprise and the rise of large-scale enterprise in Germany, 1871–1914’, in Okochi, A. and Yasuoka, S. (eds), Family Business in the Era of Industrial Growth (Tokyo, 1984), pp. 237–67Google Scholar; Kocka, , ‘Family and bureaucracy’Google Scholar; idem, ‘Entrepreneurs and managers’, pp. 578–89Google Scholar; and Pohl, H., ‘On the history of organisation and management in large German enterprises since the nineteenth century’, German Yearbook of Business History (1982), pp. 439–71.Google Scholar

59 Feldenkirchen, , ‘Banking and economic growth’, p. 127.Google Scholar

60 Lazonick, and O'Sullivan, , ‘Finance and industrial development’.Google Scholar

61 Kocka, , ‘Rise of modern industrial enterprise’Google Scholar; Chandler, A., Scale and Scope (Cambridge, 1990), pp. 393587Google Scholar; Brockstedt, , ‘Family enterprise’Google Scholar; and Pohl, , ‘History of organisation’.Google Scholar

62 Turner, H., German Big Business and the Rise of Hitler (Oxford, 1985), pp. 1011Google Scholar; and Pohl, , ‘Forms and phases’, p. 85.Google Scholar

63 Liefmann, R., Cartels, Concerns and Trusts (New York, 1977), pp. 225–32.Google Scholar

64 ibid., p. 249; and Pohl, , ‘Forms and phases’, pp. 86–7.Google Scholar

65 Liefmann, , Cartels, pp. 259–61Google Scholar; and Feldenkirchen, W., ‘Concentration in German industry, 1870–1939’, in Pohl, H. and Treue, W. (eds), The Concentration Process in the Entrepreneurial Economy Since the Late Nineteenth Century (Stuttgart, 1988), pp. 126–7.Google Scholar

66 Levy, H., Industrial Germany (Cambridge, 1935), pp. 9, 10, 206–7.Google Scholar

67 Tilly, , ‘Mergers, external growth, and finance’, p. 160.Google Scholar

68 Siegrist, H., ‘Deutsche Grossunternehmung vom späten 19 Jahrhundert bis zur Weimarer Republik’, Geschichte und Gesellschaft, 6 (1980), p. 87.Google Scholar

69 Balderston, T., ‘German banking between the wars’, Business History Review, 65 (1991)CrossRefGoogle Scholar; and Feldman, G., ‘Banks and banking in Germany after the First World War’, in Cassis, Finance and Financiers.Google Scholar

70 Weber, A., Depositbanken und Spekulationsbanken: Ein Vergleich deutschen und englischen Bankwesens (Munich, 1938), p. 147CrossRefGoogle Scholar; Whale, Barrett, Joint-Stock Banking, p. 238Google Scholar; and Feldman, , ‘Banks and banking’, pp. 246–7.Google Scholar

71 Holtfrerich, C.-L., The German Inflation, 1914–1923 (Berlin, 1986), pp. 271–8.CrossRefGoogle Scholar

72 Balderston, , ‘German banking’, p. 572.Google Scholar

73 Levy, , Industrial Germany, pp. 10, 227Google Scholar; and Pohl, , ‘History of organisation’, pp. 113–21.Google Scholar

74 Abraham, D., The Collapse of the Weimar Republic (Princeton, 1981)Google Scholar; and Turner, , German Big Business.Google Scholar

75 Hoffmann, et al. , Das Wachstum, pp. 506–9.Google Scholar

76 Neumann, F., Behemoth (New York, 1944), p. 288.Google Scholar

77 Pohl, , ‘Forms and phases’, p. 91Google Scholar; and Neumann, , Behemoth, p. 593.Google Scholar

78 McKitrick, F., The stabilization of the Mittelstand: artisans in Germany from National Socialism to the Federal Republic, 1939–1953, Ph. D. thesis (Columbia University, 1994).Google Scholar

79 Markovits, A., The Politics of the West German Trade Unions (Cambridge, 1986)Google Scholar; and Müller-Jentsch, W., ‘Germany’, in Rogers, J. and Streeck, W. (eds), Works Councils (Chicago, 1995).Google Scholar

80 Streeck, W., ‘Codetermination’, in Wilperte, B. and Sorge, A. (eds), International Yearbook of Organizational Democracy (1984)Google Scholar; and Raiser, T., ‘The theory of enterprise law in the Federal Republic of Germany’, American Journal of Comparative Law, 36 (1988).CrossRefGoogle Scholar

81 Works Constitution Act, s2(1).

82 Markovits, , Politics of West German Trade Unions, pp. 6183Google Scholar; Wiedemann, H., ‘Codetermination by workers in German enterprises’, American Journal of Comparative Law, 28 (1980)CrossRefGoogle Scholar; and Müller-Jentsch, , ‘Germany’, p. 54.Google Scholar

83 Thelen, K., Union of Parts (Ithaca, 1992), p. 80Google Scholar; and Müller-Jentsch, , ‘Germany’, p. 57.Google Scholar

84 Lazonick, W. and O'Sullivan, M., ‘Organization, finance and international competition’, Industrial and Corporate Change, 5 (1996).CrossRefGoogle Scholar

85 Edwards, J. and Fischer, K., Banks, Finance, and Investment in Germany (Cambridge, 1994), pp. 180, 182.CrossRefGoogle Scholar

87 Gessler Commission, ‘Grunsatzfragen der Kreditwirtschaft’, Scheifenreihe des Bundesministerium der Finanzen, 28 (1979), p. 467Google Scholar; and Smith, E. Owen, The German Economy (London, 1994), p. 338.CrossRefGoogle Scholar

88 Iber, B., ‘Zur Entwicklung der Aktionarsstruktur in der Bundesrepublik Deutschland, 1963–1983’, Zeitschrift für Betriebswirtschaft, 55 (1985), p. 1111.Google Scholar

89 Edwards, and Fischer, , Banks, Finance and Investment, p. 188Google Scholar; and Schreyogg, G. and Steinmann, H., ‘Zur Trennung von Eigentum und Verfugungsgewalt’, Zeitschrift für Betriebswirtschaft, 51 (1981).Google Scholar

90 Smith, , German Economy, p. 359.Google Scholar

91 Monopolkommission, Hauptgutachten II (Baden-Baden, 1978), p. 199.Google Scholar

92 Gottschalk, A., ‘Der Stimmrechtseinfluss der Banken in den Aktionarsversammlungen von Grossunternehmen’, WSI Mitteilungen, 5 (1988).Google Scholar

93 Monopolkommission, Hauptgutachten.Google Scholar

94 Dyson, K., ‘The state, banks and industry’, in Cox, A. (ed.), State, Finance and Industry (Brighton, 1986), p. 139.Google Scholar

95 Gall, et al. , Deutsche Bank, pp. 610–56.Google Scholar

96 Dyson, , ‘State, banks and industry’Google Scholar; Esser, J., ‘Bank power in West Germany revised’, West European Politics, 13 (1990), pp. 1732CrossRefGoogle Scholar; and Edwards, and Fischer, , Banks, Finance and Investment, pp. 228–40.Google Scholar

97 Wallich, H., Mainsprings of the German Revival (New Haven, 1955), p. 166.Google Scholar

98 Shonfield, A., Modern Capitalism (Oxford, 1965), p. 276.Google Scholar

99 ibid., p. 279; and Abelshauser, W., ‘West German economic recovery, 1945–1951’, The Three Banks Review, 135 (1982).Google Scholar

100 Edwards, and Fischer, , Banks, Finance and Investment, pp. 4970.Google Scholar

101 ibid., p. 127.

102 Mayer, C. and Alexander, I., ‘Banks and securities markets’, Journal of the Japanese and International Economies, 4 (1990)CrossRefGoogle Scholar; Hall, B., ‘Corporate restructuring and investment horizons in the United States, 1976–1987’, Business History Review, 68 (1994)CrossRefGoogle Scholar; and Corbett, J., ‘The financing of industry, 1970–1989’, Journal of the Japanese and International Economies, 10 (1996).CrossRefGoogle Scholar

103 Lazonick, and O'Sullivan, , ‘Finance and industrial development’.Google Scholar

104 O'Sullivan, M., ‘Sustainable prosperity, corporate governance, and innovation in Europe’, in Smith, J. and Michie, J. (eds), Innovation, Cooperation and Growth (Oxford, forthcoming).Google Scholar