Transaction costs depend on the degree of information asymmetry. If sellers are motivated to reveal their products’ quality, the cost accordingly decreases. If the quality information is strongly asymmetric, a device that guarantees commitment to a certain minimum quality could provide sellers with a quality premium. Such devices include quality inspection systems and brand reputation as established by either a merchant or a producer. In the market for raw silk, the largest export commodity of nineteenth-century Japan, Western trading companies dominated quality control by the mid-1880s. In the mid-1880s, Japanese manufacturers internalized the inspection and branding process, earned quality premiums, and began to grow rapidly. A higher reputation for quality led to a higher return and the growth of a company. In contrast, in Italy, quality was controlled by the region’s chamber of commerce, and quality premiums were shared by the region’s manufacturers. As a result, while Japan had enormous leading companies, the size of the companies in Italy remained small.