Changes in transactional relationships and the switchover to new coordination in a modern industrial agglomeration in a Japanese City during the interwar period: A pharmaceutical industrial district in Osaka, 1914-1940

Abstract

This paper reexamines industrial agglomeration in interwar Japan through the example of the pharmaceutical industry in the district of Doshomachi, central Osaka. Many modern Japanese cities inherited early modern industrial agglomerations after World War II. Scholars have identified these agglomerations, which were a result of the traditional transactional relationships among traders, merchants, and manufacturers, as an underlying factor that contributed to the rapid economic growth in postwar Japan. While pevious studies were mainly interested in manufacturers, they did not fully examine wholesalers who were also part of modern Japanese industrial agglomerations. Because drastic changes occurred in most industries and distribution systems in Japan, it is important to clarify reciprocal relationships between wholesalers and manufacturers during the interwar period. This paper therefore analyzes the coordination between wholesalers and manufacturers in an industrial agglomeration during the interwar period, as noted in recent local industrial geographical discussions of the "regional regulation" approach. The results of this study can be summarized as follows. Pharmaceutical wholesalers remained concentrated in Doshomachi during the interwar period, even during the difficult economic stagnation of the pharmaceutical industry in Japan. However, because of the turmoil in the pharmaceutical market during World War I, the traditional cooperative relationships among wholesalers in Doshomachi broke down, became adversarial, and lost their coordinative function during the interwar period. Further, the rising pharmaceutical manufacturers in Osaka replaced the wholesalers and coordinated conflicts and contradictions in their interests. A few manufacturers who had been wholesalers previously and had abundant capital dominated the coordination among manufacturers to solve multiple problems promptly during the rapid development of the heavy chemical industry and national regulation during the interwar period. Many other pharmaceutical wholesalers were reorganized as wholesalers affiliated with the few remaining manufacturers. Hence, most conflicts among the affiliated wholesalers, who now belonged to the same chain, resolved themselves. These findings suggest that the transactional relationships and coordination in this industrial agglomeration changed drastically during the interwar period, although the agglomeration of wholesalers in Doshomachi had remained unchanged since the 19th century. These results are valuable in showing how the reorgarlization of traditional social relationships, as in Doshomachi, should be considered when researching interwar industrial agglomerations in other cities.