Skip to main content
Article thumbnail
Location of Repository

"Industrial Finance Before the Financial Revolution: Japan at the Turn of the Last Century"

By Yoshiro Miwa and J. Mark Ramseyer


In a series of pathbreaking articles, Sylla argues that successful economies experience "financial revolutions" before they undergo their periods of rapid growth. In turn, governments generate these revolutions by putting public finance in order, and thereby giving private investors the incentive to create banks and securities markets. In the U.S., suggests Sylla, Hamilton masterminded the revolution. Might Matsukata, he continues, have done the same in Japan? Consistent with much of Sylla's work, Japan did indeed experience a financial revolution in the late 19th century. Matsukata, however, did not mastermind the revolution in advance of private-sector demand. Instead, private investors created the financial infrastructure in response to demand from industrial firms. What is more, most firms (at least in the pivotal silk industry) raised the funds they needed through trade credit rather than securities markets or banks. In this environment, the financial revolution contributed to economic growth in three ways: (a) the new securities markets funded the very largest firms, particularly the railroad firms; (b) the new banks sold the transactional services that merchants used to provide their trade credit, and (c) the banks supplied some of the funds that the merchants as intermediaries then re-lent to the manufacturing firms.

OAI identifier:

Suggested articles


  1. (1997). An Economic History of the Silk Industry, 1830-1930. Cambridge:
  2. (2002). Banks and Economic Growth: Implications from Japanese History.
  3. (2000). Corporate Governance in Transitional Economies: Lessons from the Prewar Japanese Cotton Textile Industry.
  4. (1999). Emerging Markets in History: The United States, Japan, and Argentina.
  5. (2004). Finance and Growth: Theory and Evidence. NBER Working Paper 10766. Forthcoming
  6. (2002). Financial Systems and Economic Modernization.
  7. (1990). Jiten: Showa senzenki no Nihon -- Seido to jittai [Dictionary: Pre-war Showa Japan -- Institutions and Reality].
  8. (1989). Jiyu minken to Okuma-Matsukata zaisei [The Freedom and Popular Rights Movement and Okuma-Matsukata Public Finance].
  9. (1982). Kikai seishi no kakuritsu to sanshi gijutsu [Sericulture and the Establishment of Mechanized Silk Reeling].
  10. (1999). Kindai Nihon kin'yu shi jo setsu [Introduction to Early Modern Japanese Financial History].
  11. (1990). Kindai yosangyo no hatten to kumiai seishi [Early Modern Sericulture and Unionized Silk Reeling].
  12. (1998). Law and Finance.
  13. (2004). Matsukata zaisei kenkyu [Studies in Matsukata Public Finance]. Tokyo: Minerva shobo.
  14. (1976). Meiji ki kabushiki kaisha bunseki josetsu [Introduction to the Analysis of Meiji-Era Corporations].
  15. (1986). Meiji ki no gunma no seishi [Silk Reeling in Meiji-era Gunma].
  16. (1961). Meiji zenki Nihon kin’yu kozo shi [The Financial Structure of Early Meiji Japan]. Tokyo: Iwanami shoten.
  17. (1968). Nihon kindai keizai keisei shi [History of the Establishment of the Early Modern Japanese Economy]. Tokyo: Toyo keizai shimpo sha.
  18. (1960). Nihon kindai seishi gyo no seiritsu [The Establishment of the Early Modern Silk Reeling Industry in Japan]. Tokyo: Ochanomizu shobo.
  19. (1970). Nihon sangyo kin'yu shi kenkyu: Boseki kin'yu hen [Studies in the History of Japanese Industrial Finance: Cotton-Spinning Finance]. Tokyo: Tokyo daigaku shuppankai.
  20. (1974). Nihon sangyo kin'yu shi kenkyu: Orimono kin'yu hen [Studies in the History of Japanese Industrial Finance: Weaving Finance]. Tokyo: Tokyo daigaku shuppankai.
  21. (1933). Nihon sanshigyo shi: seishi shi [A History of the Japanese Silk Thread Industry: Reeling]. No publication information.
  22. (1930). Nippon zaibatsu no kaibo: chu [The Anatomy of the Japanese Zaibatsu: vol. II]. Tokyo: Chuo koron sha.
  23. (1928). Okabu 50 nen shi [Fifty-year History of the OSE]. Tokyo: Osaka kabushiki torihikijo.
  24. (1999). Shaping the US financial System, 1690-1913: The Dominant Role of Public Finance."
  25. (1958). Shiho seido [The Judiciary]. In Nobushige Ukai,
  26. (1979). Shiro Fujino & Akira Ono.
  27. (1911). Silk: Part 1. Encyclopaedia Britanica, 11th ed.
  28. (1911). Silk: Part 2. Encyclopaedia Britanica, 11th ed.
  29. (1995). The Politics of Oligarchy: Institutional Change in Imperial Japan. New York:
  30. (2002). The Silk Weavers of Kyoto: Family and Work in a Changing Traditional Industry.
  31. (2002). The Value of Prominent Directors: Corporate Governance and Bank Access in Transitional Japan.
  32. (1928). Tokyo kabushiki torihiki jo 50 nen shi [Fifty-year History of the Tokyo Stock Exchange]. Tokyo: Tokyo kabushiki torihiki jo.
  33. (2003). Trade Credit, Financial Intermediary Development, and Industry Growth.
  34. (1997). Trade Credit: Theories and Evidence.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.