Do business associations sufficiently add value in the steel industry in emerging markets

Abstract

Literature in business associations reveals an efficient confluence of business to provide member firms with benefits obtained from cooperation with other firms in the industry. They assist firms through knowledge building, knowledge deployment, and standard setting. They can particularly play an important role in the areas of market integration, source of information, lobbying for regulation, standard setting and policy. Studies have also shown that lack of political influence helps discourage good governance or the ability to manage public affairs and deliver basic services; when acting alone individual firms may not be capable of taking part effectively in the interchange with government. This study involved a qualitative study which consisted of case studies and in-depth face to face interviews with association and member companies’ executives that are actively involved in business association activities in the South African Steel industry. The study concluded that business associations arise for different reasons and in different environments, to assist business with meeting certain challenges; they can sometimes play a positive role by making up for failing development institutions but they can also be detrimental to social welfare because of rent-seeking behaviour.