Send message to Author

Paper short abstract

This study analyses the changing nature of entrepreneurial activity in Japan’s prewar life insurance industry in response to the industry’s evolution by focusing on the social status, professional background, government connections of entrepreneurs and on the role of business conglomerates.

Paper long abstract

Entrepreneurship is a defining feature of early industry formation, yet much less is known about its changing role and character as an industry evolves. Using Japan’s prewar life insurance industry as a historical case, this study compares entrepreneurs who founded life insurance companies during the industry’s formative phase (1881–1905) with entrepreneurs who entered after the industry’s institutional infrastructure had been established. Life insurance constitutes a high-trust, knowledge-intensive, and tightly regulated financial service industry offering limited room for innovation. Japan’s first viable life insurance company based on scientific methods appeared in 1881. By 1905, official mortality tables, standardized medical examinations, university-level education in actuarial and insurance sciences and an industry specific regulatory framework had been introduced, and the association representing the interests of life insurance companies had been founded. As the early period of experimentation and legitimacy-building came to an end, the business environment became characterized by standardized procedures and regulated competition. However, entrepreneurial activity continued up into the 1920s, before the consolidation phase set in. Drawing on rich company-level and biographical records, this study examines how changes in the institutional environment between the first and second phase impacted the nature of entrepreneurship. It finds distinct differences in entrepreneurial activity within the wide diversity characteristic of both development stages. These differences relate to the social status of entrepreneurs, their professional background and their connections with regulatory authorities, and to the role of business conglomerates.

Keywords: Entrepreneurship, industry evolution, life insurance, prewar Japan, business history