Explaining the Membership of Sectoral Business Associations

Abstract

This paper gives the first systematic statistical assessment of the factors explaining the membership of sector business associations. An important aspect of the argument is the importance of differentiating associations by the types of their members because this reflects their demand orientation and their decisionmaking structures. Associations of companies (traditionally termed trade associations), individuals (traditionally termed professional associations), owner-managers, mixed member types, and federations are each different types of member bodies. The estimates in the paper, using new survey evidence, confirm the significance of these distinctions and demonstrate the different factors explaining association membership size, density of encompassing of members (as a proportion of the number of businesses in their sector, and the proportion of the sector's turnover), as well as the membership joining and lapsing rates. The results generally confirm the dominance of the logic of influence on trade associations and the logic of services on other associations. The role of sector concentration, association age, association size, and management structure are also shown to be significant explanatory variables for some association types.