Exploring the Use of Trade and Professional Association Services

Abstract

This paper examines how the services offered by sector business associations are used and the impact that they offer. A large-scale survey of small and medium sized businesses is used to infer how association services operate. An important focus is to determine the level at which the fixed costs of association services are covered: this defines a minimum size level for associations. This is found to be between one half and one member of staff per thousand businesses in that sector. This is a fairly low barrier to market entry by an association, which helps to explain the fragmentation of associations. This is further indicated by the existence of declining internal economics of scale and scope for larger association sizes. This suggests that efforts to stimulate association merger and co-operation will continue to meet with limited success.