Japanese General Trading Companies Research Articles

The Weaknesses of Kyrgyz Exporters Compared to the Japanese Trading Companies in the Context of Chandler’s Industrial Organization

The Kyrgyz model of export, for example of agricultural products, often demonstrates its organizational weakness which is not stimulating the economy of the country as a whole. This article shows the example of the Japanese general trading companies which successfully developed their own model of optimized outer trade in the context of Chandler’s industrial organization theory.

일본종합상사의 지속가능경영 활동에 관한 탐색적 연구

일본종합상사의 지속가능경영 활동에 관한 탐색적 연구

The Risk Management System of Japanese General Trading Companies

The Risk Management System of Japanese General Trading Companies

Family versus nonfamily business: A comparison of international strategies

The internationalization strategies of family businesses versus nonfamily businesses remain a neglected area of study. This investigation uses a sample of 759 Japanese subsidiaries worldwide that can be identified as family businesses or nonfamily businesses to reveal two key results. First, family businesses establish fewer joint ventures than nonfamily businesses, in relative terms, and resort less to using Sôgô Shôsha, or Japanese general trading companies. This result implies family businesses prefer more to remain independent compared with nonfamily businesses. Second, expatriation policies do not differ significantly between family businesses and nonfamily businesses, contrary to a priori expectations. Differences in the strategic behavior of family businesses and nonfamily businesses therefore do not appear in every aspect of the internationalization process.

A Controversy on the Decline of Japanese General Trading Companies and Their New Business

A Controversy on the Decline of Japanese General Trading Companies and Their New Business

Markets Nurture Relationships: Changing Relationship Patterns of Japanese GTCs in the Post-bubble Era

Japanese General Trading Companies (GTCs) have faced significant changes in their business environment, with more open markets and more internationally experienced trading partners. We investigate here some of the specific contractual changes that the firms have made in order to respond to, and more importantly take advantage of, the changed environment. The literature in economics, organization theory and political science has paid insufficient attention to the effects of change on the nature of business relationships. Firms are usually modelled as able to change very quickly, or alternatively—and sometimes simultaneously—incapable of adjusting to new environments. GTCs can use the change to craft new relationships and, however imperfectly, adjust to the new environment. Their accumulated relation-specific information is the source of flexibility. Using information from two sets of interviews of trading company managers, we show that seemingly out-of-date relationships can have embedded in them information-based resources that allow these institutions to take advantage of new situations. Newly developed and more open markets can paradoxically lead to new and even more complex trading company relationships. Markets and hierarchies are not always substitutes. Trading firms use their ‘out-of-date’ relationship and information resources in the new environment as well.

A Comparative Study of the Economic Activities of Sogo Shosha in the United States and Canada in the early 1990s

The purpose of this paper is to clarify economic activities and strategies of sogo shosha, that is, the nine largest Japanese general trading companies, in response to different markets, namely the United States and Canada, during the early 1990s. This was a crucial period, due to the commencement of the North American Free Trade Agreement and the bursting of the Japanese bubble economy. The paper focuses on the characteristics of Japanese trading and investment patterns during the period in question, with particular attention to the activities of sogo shosha, in order to understand their current economic activities in North America. The American sogo shosha emphasize both offshore trade and domestic trade in the United States. The Canadian sogo shosha largely depend on the bilateral trade between Canada and Japan. Sogo shosha investment in the United States was more market-orientated, while that in Canada was more resource-oriented. The paper also includes exploration of the locational and functional implications of branches of sogo shosha. By changing their organizational operations and with concomitant functional changes in branches, four sogo shosha in the United States have pursued the localizing business strategies, while their counterparts in Canada have remained closer to the trading prototype. The examination of the different trading and investment patterns of sogo shosha in the United States and Canada reveals that they have recognized the United States and Canada as two distinct markets. It also shows the economic environments of the host and home countries have affected the economic activities of sogo shosha in North America.

The influence of sogo shosha companies on contract bargaining in the Pacific metallurgical coal trade

The role of trading companies has been held by many economists to be that of reducing transaction costs between buyer and seller. This article examines the influence that Japanese general trading companies, known in Japan as sogo shosha, have on contract bargaining outcomes between buyers and sellers in the trade between the exporters of Australia, and Japan, the world's largest importer of metallurgical coal. Propositions that sogo shosha companies have played a differential role, influenced by factors peculiar to Japanese business culture, are examined in light of econometric modelling findings suggesting distortions in Pacific metallurgical coal markets. The veracity of the propositions is also explored by a survey of the literature and management opinion amongst coal exporters from Australia and Canada. Implications with respect to foreign ownership policies and countervailing contract bargaining strategies by Australian exporting interests are then explored.

Americansogo shosha:American trading companies in the twenty‐first century

Japanese General Trading Companies orsogo shoshashave been instrumental in the phenomenal Japanese economic miracle of the last 40 years. In 1982, the USA passed the Export Trading Company Act to home grow its ownsogo shoshas; to date the Act has been ineffective ‐ yet the need remains. Examines what trading companies are and what functions they perform. Observes the steps that need to be taken to make them profitable and successful. Postulates that trading companies are an integral part of this country’s future.

The Future of Sogo Shosha in a Global Economy

The Japanese “sogo shosha” – Japanese General Trading Companies – have played a major role in the phenomenal growth of the Japanese economy. Throughout the century, sogo shosha have secured raw material import inputs and have marketed and manufactured high value‐added exports of the Japanese economic machine. However, the twenty‐first century is nearly here – along with its global interdependent economy. How will the sogo shosha respond and adapt to these new economic realities? Does the sogo shosha have a future? The answer is “Yes”, but some changes are necessary if the sogo shosha are to survive in the next century.

Barriers to the Development of a European General Trading Company

The success of the Japanese and Korean General Trading Companies (GTCs) led many countries to promote the development of GTCs based on the Japanese model. In particular many EC countries compelled by the need to reduce their trade deficits promoted the development of GTC-like trading companies. This paper examines the factors that prevent the development of GTCs in the EC. External as well as internal barriers have been examined and related to GTCs' development cycle. A sample of large European TCs and international trade authorities have been surveyed. A set of barriers that inhibit the development of GTC has been identified.

Logic of the Japanese general trading companies

In recent years some American firms attempted to create an equivalent of the Japanese general trading companies, but they failed because of the cognitive and epistemological differences between the two kinds of companies. It is a mistake to try to understand the Japanese companies in terms of organizational structure or operational procedures. This article discusses the cognitive and epistemological aspects of the Japanese general trading companies.

Between markets and hierarchies: The multinational operations of Japanese general trading companies

AbstractThis paper questions the conclusion of Kojima and Ozawa (1984) that the overseas activities of Japanese General Trading Companies are best explained by Japanese‐type theories of the multinational enterprise. Such investments appear amenable to inclusion within the prevailing micro‐economic paradigm when due consideration is given to the existence of ownership‐specific advantages and economic incentives to federated business relationships. The inadequacies of the Kojima/Ozawa treatment stem from reliance on a deficient theoretical base, selective description of the characteristics of trading companies and superficial treatment of the modern theory of the multinational enterprise. The reinterpretation offered casts doubts on the proferred welfare effects of this type of investment.

Japanese Sogo Shosha and the U.S. Export Trading Companies

Recent legislation in the U.S. concerning export trading companies has drawn attention to the Japanese general trading companies. While the intent of the ETC Act was not to replicate the sogo shosha model in the U.S., there are some parallels which we can identify. In this paper we examine the evolving forms of the sogo shosha and ETCs, and show how they compete directly in some areas of international trade. Although early performance results for U.S. ETCs are not encouraging, longer term results are expected to improve. To support this expectation, we identify current problems and offer recommendations for improvement. These recommendations are framed in the context of the U.S. business environment, and implications for public policy are assessed.