A New Model of Japanese Industrial Districts Combining Supplier-Side and Purchaser-Side Logic

Abstract

This paper proposes to combine supplier-side and purchaser-side logic in a new model of Japanese industrial districts. We interviewed large retail firms that were purchasers for industrial districts and 21 small-scale firms located in Tokyo’s Ota Ward and Joto area that were the suppliers. Our interviews clearly highlighted the importance of business practices called “Kouza” and “Chouai.” Large enterprises on the purchaser side deal only with kouza-holding firms (direct suppliers) and chouai-saki, which coordinate sub-suppliers. The assumption of such business practices implies that firms holding kouza within the industrial district are a necessity for purchasers to enjoy economies of agglomeration.

Keywords

• economies of agglomeration
• local markets for special skills
• kouza