General Trading Companies

General trading companies (GTCs) were taken up as an important topic for study by the Japanese Experience project on the ground that GTCs were an especially important intermediary for the importation of technology during the process of Japan’s modernization. Moreover, because GTCs’ organizations and activities were themselves looked upon as an example of technological “software,” it was thought worthwhile to identify the factors that led to the formation of GTCs, some of which were unusually large organizations.

A number of trading companies emerged as early as the 1870s and they gradually developed into large firms. They were engaged in a wide range of activities such as Japanese exports and imports, multi-foreign trade, technology transfers, the development of natural resources, and local production.

It has been emphasized that the early separation between ownership and management and the recruitment of competent personnel from among university graduates enabled GTCs to expand in prewar Japan. The financial support given by business groups (zaibatsu) to which the GTCs belonged, as well as the government’s policy of fostering the GTCs were also important factors.

The end of the war in 1945 meant the temporary suspension of all the overseas operations of the trading companies, and the complete loss of all overseas assets as well. However, with the beginnings of postwar economic recovery, general trading companies showed a remarkable growth. In this process, overseas networks of branches, offices, and affiliated companies performed a significant role in boosting the fortunes of the general trading companies.