Japan's Cotton Spinning Industry: 1868 - 1897

Abstract

This paper analyzes the elements affecting the transformation of Japan's comparative advantage in the cotton spinning industry from 1868 to 1897. Econometric analysis supports the notion that the economies of scale due to learning-by-doing and externalities influenced the productivity of the cotton spinning industry. This suggests that the establishment of pilot mills, the extension of subsidized loans, and the other government policies to support this infant industry positively affected its development.