""Voice" and "Exit" in Japanese Firms during the Second World War: Sanpo Revisited"

During the Second World War, the Japanese government and private sector searched for and implemented new mechanisms for coordination and new incentives. One of these was sangyo hokokukai or sanpo. Sanpo unit was essentially an organization of the employer and employees of each firm, which held employees meetings to moderate labor relations. In this paper, I examined the role of sanpo, using prefectural data and firm level data, based on a framework integrating the "voice view" of unionism and the transaction cost economics. According to the analysis of prefectural data, sanpo reduced the level of participation in labor disputes until around 1941, and enhanced labor productivity until 1942. Estimating production function by monthly firm level data from the cotton spinning industry, we found that sanpo increased TFP by 3.1%. Also, from the annual establishment level data from the coal mining industry, we can confirm that sanpo enhanced labor productivity.