Small enterprise affiliations to business associations and the collective action problem revisited

The objective of this study is to determine whether there is a consistent case for encouraging business representation through encompassing, sector-wide associations rather than narrowly constituted trade associations. The study draws on evidence from a large-scale survey of SMEs in New Zealand to examine whether trade and sector associations attract different types of enterprise, the motivations for membership, the benefits obtained and how association membership can be made more attractive. Results suggest that each type of association appeals to a particular range of enterprises and that trade associations play a more diverse role than simply lobbying for a narrow constituency.