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MAKING FRIENDS TO INFLUENCE OTHERS: ENTRY AND CONTRIBUTION DECISIONS THAT AFFECT SOCIAL CAPITAL IN AN ASSOCIATION
Author(s) -
Chouinard Hayley H.,
Galinato Gregmar I.,
Wandschneider Philip R.
Publication year - 2016
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12297
Subject(s) - affect (linguistics) , productivity , marginal product , economics , social capital , association (psychology) , government (linguistics) , production (economics) , capital (architecture) , capital good , public economics , labour economics , microeconomics , public good , economic growth , philosophy , linguistics , sociology , social science , archaeology , epistemology , history
We examine factors affecting entry and contribution to an association that provides different goods using social capital formed by heterogeneous firms that lobby in a political economy environment. We identify how associations attract the most productive firms or the least productive firms in an industry and explain how such associations differ in their intensive and extensive marginal contributions to social capital. We find that the level of regulatory stringency, association products including capital goods for members or lobbying to influence regulation, and government influenceability affect membership and contribution decisions. These results vary with firm productivity. Often, an increase in government influenceability increases social capital in associations composed of highly productive firms because they prefer to influence policy while less productive firms prefer more association‐produced production inputs. ( JEL D71, D73)