France and Mitsubishi in the Emergence of the Aeronautical Market in Japan

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  • On the Benefits of General Trading Companies (1918–1928)

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<p>The importance of general trading companies in Japan’s economic development is widely acknowledged, but little is known about their role in the transfer of technology and innovations. We address this issue by examining the emerging aircraft industry in Japan during the 1920s, focusing on its main foreign partner, France, and one of the largest Japanese groups, Mitsubishi. We show that while the French influence in the Japanese market remained unchallenged up to the mid-1920s, it faded away afterward due to the absence of French trading companies on the ground, despite considerable support from the French government. This contrasts with our analysis of the Japanese side. Using its worldwide network, Mitsubishi Trading Co. provided Mitsubishi Motors Co. with appropriate information and contracts with French as well as German companies. It eventually succeeded in creating joint ventures with these close partners. Their early failure in 1926 sparked a shift from importing technology via trade agreements to developing the industry through manufacturing (e.g., creation of Mitsubishi Aircraft Co. in 1928). Thus, Mitsubishi Trading proved to be an efficient early market developer for the Japanese side, whereas French business suffered from not having similar trading companies in Japan and being overdependent on state structures.</p>

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