Business Associations as a Business-Government Liaison: An Empirical Analysis

Relying on the survey data of 957 manufacturing firms, conducted in 2009 by the Institute for Industrial and Market Studies we found that business associations are more frequently joined by larger companies; firms located in regional capital cities; and firms active in investment and innovations. By contrast, business associations tend to be less frequently joined by business groups' subsidiaries and firms non-responding about their ownership structure. Business associations are a link in the framework of government-business exchanges, primarily at the regional and local level. Indeed, business association members are more active in assisting regional and local authorities in the social development of their regions and simultaneously they get government support more frequently. However, this effect proved insignificant for federal support. In general, our results allow us to believe that at present, business associations consolidate the most active, advanced companies and act as collective representatives of their interests. For this reason, business associations can be regarded as interface units between the authorities and business and as a possible instrument for promotion of modernization.