The Rise and Fall of Industrialization: The Case of a Silk Weaving District in Modern Japan

The production of habutae , a simple silk fabric, expanded rapidly between 1890 and 1918 in Japan's Fukui Prefecture, with large exports to Europe and the United States. The production of habutae , initially woven by hand, was labour intensive, but it gradually became capital‐intensive after the introduction of power looms. Production and export of this fabric declined precipitously from 1918. In this paper, we attribute the rise and then fall of Japan's production and export of habutae to its changing comparative advantage, which is associated with shifts from labour‐using to capital‐using production technology initiated in the United States.