In the past, much attention has been paid to bilateral assembler-supplier relationships as a source of Japanese industrial competitiveness. In Discussion Paper No. 1147, Mari Sako argues that the hitherto neglected area of inter-supplier coordination in technology diffusion is at least equally important in accounting for the overall performance of the Japanese motor industry.

The paper reports on a large-scale survey of nearly 500 parts suppliers the author conducted in 1993. It analyses the historical development, structure, and functions of suppliers' associations in Japan's motor industry. The main findings are that these associations were established as part of the war effort in the Second World War, in response to capital shortages, and in anticipation of trade and capital market liberalization in the 1960s. Principal benefits to suppliers beyond initial incentives of establishment are reported to be access to better information about assembler-customers, opportunities to exchange know-how among members, and smoother assembler-supplier coordination, for example, in terms of technical specifications.

Suppliers' Associations in the Japanese Automobile Industry: Collective Action for Technology Diffusion
Mari Sako

Discussion Paper No. 1147, March 1995 (IO)