Trade associations: Exploring the Trans Tasman environment for business associability

Abstract

AbstractTrade associations are a form of business network distinguished by third party coordination and representation of sector-affiliated organisations. In New Zealand, a recent review found that trade associations have made increasing contributions to industry and business development. The possibility that New Zealand's associations benefit from a small country advantage in supporting collective activity is explored. This follows suggestions in the New Zealand survey and Nordic claims that small economies benefit from shared trust that facilitates business cooperation. A matched sample of 13 Australian and New Zealand trade associations reveals that New Zealand's associations tend to have higher levels of membership and are less troubled by ‘free riders’ than their Australian counterparts. There is weak evidence that support for trade associations reduces with increases in enterprise diversity (size and activity specialization) within an industry and that the organisation of industry value chains influences trade association activity. Any advantage in maintaining participation is reduced by the greater resource strength of Australian associations. Further investigations of Trans Tasman differences in business associability are justified.