The Emergence of New Markets for Environmental Services: The Role of U.S. Shellfish Industry Associations

Abstract

Does membership in industry associations affect whether firms extend beyond their traditional markets? I use a dataset from a survey of US shellfishermen and empirically examine the relationship between membership in associations and participation in new markets. Traditionally, shellfishermen have been growing and harvesting shellfish for human consumption. However, some shellfishermen also engage in alternative revenue-generating environmental projects, such as coastal restoration, clean-up and research. Drawing on the organizational literature on associations and economic sociology literature, I test hypotheses about whether associations contribute to generating value and promoting cooperation among their members thus fulfilling requirements for a new market to emerge. I find that shellfishermen who are members of industry associations are more likely to participate in alternative revenue generating activities and derive revenues from environmental projects. I argue that industry associations play an important role in firms’ decisions to pursue new markets by contributing to creating value and promoting cooperation.