Making Friends to Influence Others: Entry and Contribution Decisions that Affect Social Capital in an Association

16 Pages Posted: 26 Feb 2016

See all articles by Hayley H. Chouinard

Hayley H. Chouinard

Washington State University - School of Economic Sciences

Gregmar I. Galinato

Washington State University - School of Economic Sciences

Philip R. Wandschneider

Washington State University - School of Economic Sciences

Date Written: April 2016

Abstract

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 associationā€produced production inputs.

JEL Classification: D71, D73

Suggested Citation

Chouinard, Hayley H. and Galinato, Gregmar I. and Wandschneider, Philip R., Making Friends to Influence Others: Entry and Contribution Decisions that Affect Social Capital in an Association (April 2016). Economic Inquiry, Vol. 54, Issue 2, pp. 819-834, 2016, Available at SSRN: https://ssrn.com/abstract=2738284 or http://dx.doi.org/10.1111/ecin.12297

Hayley H. Chouinard (Contact Author)

Washington State University - School of Economic Sciences ( email )

P.O. Box 646210
Pullman, WA 99164
United States
(509) 335-8739 (Phone)
(509) 335-1173 (Fax)

HOME PAGE: http://www.ses.wsu.edu/PDFFiles/FacultyVita/hayleycv_1_2007_SES.pdf

Gregmar I. Galinato

Washington State University - School of Economic Sciences ( email )

Pullman, WA 99164
United States

Philip R. Wandschneider

Washington State University - School of Economic Sciences ( email )

P.O. Box 646210
Hulbert Hall 101
Pullman, WA 99164-6210
United States

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