INTRODUCTION
• Large family-owned conglomerates known as zaibatsu have long been credited with leading
Japanese industrialization during the Meiji period
• characteristics associated with zaibatsu increase a firm’s likelihood of being an industry pioneer compared to firms with a large number of shareholders

ADVANTAGES OF ZAIBATSU
• Size
• Family ownership
• Diversified holdings
• Employment of well-educated salaried managers
• Access to natural resources

UNCOMFORTABLE OBSERVATIONS
OF ZAIBATSU
• Labour-intensive (primarily in shipping and merchandizing)
• Did not lead development in two important early sectors, cotton spinning and railways
• Government favouritism

PURPOSE OF THE STUDY
• To test whether characteristics typical of zaibatsu, namely diversification and concentrated private ownership, increase the likelihood of being an industry pioneer, which in turn may gauge how important these business groups were to technological adoption in Meiji Japan

FINDINGS OF STUDY
• There are pros and cons to diversification
• Positive correlation exists between non-traded ownership and first entry
• Zaibatsu in pioneering sectors using technologies similar to those already in the market incur less entry risk and demonstrate less leadership

• Scarce private capital and financial intermediation suggest problems mobilizing investment funding for capital-intensive industries, which played to the advantages of zaibatsu affiliation

LIMITATIONS OF STUDY
• Government
• Trade
• Foreign investment

CONCLUSION
• Although this article supports the view that zaibatsu had a disproportionate impact on Japanese industrialization, its results also challenge the notion that they were vanguards of innovation, especially in the latter half of the period
• characteristics like diversification indeed confer advantages to industry pioneering, although with diminishing returns