Business Associations, Lobbying, and Endogenous Institutions

CentER Discussion Paper No. 2014-071

TILEC Discussion Paper No. 2014-043

40 Pages Posted: 28 Nov 2014

See all articles by Maria Jose Larrain

Maria Jose Larrain

Tilburg Law and Economics Center (TILEC)

Jens Prufer

Tilburg University; Tilburg University - Department of Economics; Tilburg University - Law and Economics Center (TILEC)

Date Written: November 21, 2014

Abstract

Are business associations - private, formal, nonprofit organizations designed to promote the common interests of their members - positive or negative for the economy and overall welfare? Scholars from institutional and organizational economics, on the one side, and from industrial organization, law & economics, and public choice, on the other side, have given different answers to this question, which is instrumental for policy making. We construct a model that endogenizes association membership of firms and the main functions of associations, which can have positive or negative spillovers on the economy. We derive predictions regarding associations’ functions and their net welfare effects, depending on the level of property rights securitization, which are in line with empirical observations.

Keywords: Business Associations, Trade Associations, Professional Organizations, Guilds, Lobbying, Private Ordering, Endogeneous Institutions, Quality of Legal Institutions

JEL Classification: D02, D62, D71, D72, L44

Suggested Citation

Larrain, Maria Jose and Prufer, Jens, Business Associations, Lobbying, and Endogenous Institutions (November 21, 2014). CentER Discussion Paper No. 2014-071, TILEC Discussion Paper No. 2014-043, Available at SSRN: https://ssrn.com/abstract=2531307 or http://dx.doi.org/10.2139/ssrn.2531307

Maria Jose Larrain (Contact Author)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Jens Prufer

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg University - Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
86
Abstract Views
2,561
Rank
527,956
PlumX Metrics