Organizational Feature, External Constraints and Capability of Business Association

Constructing assessment indicators of institutional capacity and service ability of business association, this paper's positive analysis shows that organizational feature and external constraints impact institutional capacity which further affects service ability. For organizational factors, concurrent posts of officials or retired ones don't benefit improvement of institutional capacity, especially the negative influence of retired officials. Income has significant positive impact on service ability of business association, but no impact on institutional capacity. For external constraints, industrial competition do harm to institutional capacity as well as service ability, which may induce rent-seeking activities. The rivalry of business associations doesn't exert any influence on both institutional capacity and service ability. However, this competition significantly restrains rent-seeking activity. Public policy helps advance institutional capacity of “membership compliance with rule” which has no effect on the elevation of service ability, but could nevertheless reduce the possibility of rent-seeking. Institutional capacity has positive effect on both general service ability and positive service ability. However, it exerts no effect on negative ability.