Role of Trade Associations on Entrepreneurial Development

© Kamla-Raj 2013 J Soc Sci, 37(1): 45-53 (2013)

Role of Trade Associations on Entrepreneurial Development inNigeria’s Road Transport Industry

P. C. Ugboaja1#, C. Onyemechi2*, E. A. Ejem1 and W. I. Ukpere3

1Department of Transport Management Technology, Federal University of Technology,Owerri, Imo State, Nigeria

Telephone: #<+234 (0) 8037207696>, *<+234 (0) 8063928094>;E-mail: #<[email protected]>, *<[email protected]>

2Department of Maritime Management Technology, Federal University of Technology,Owerri, Imo State, Nigeria

Telephone: +234 (0) 8035448661, E-mail: [email protected] of Industrial Psychology and People Management, Faculty of Management,

University of Johannesburg, South AfricaE-mail: [email protected]

KEYWORDS Trade Associations. Entrepreneurial. Development. Road Transport. Nigeria

ABSTRACT The purpose of this paper is to substantiate the major roles of trade associations on entrepreneurialdevelopment in Nigeria’s Road Transport Industry. This paper offers an analytical assessment of the contributionof trade associations. To do this, a survey research method was adopted for the study and questionnaires were usedas data collection method. A random sample of one hundred and forty four (144) trade associations in Nigeria’sroad transport industry were selected for the study out of a population of two hundred and twenty- four (224 tradeassociations with seven hundred and twenty (720) respondents. For completeness, a sample of six hundred andfifty- seven (657) related organizations (infinite population) were included in the study. A total of one thousand,three hundred and seventy seven (1377) questionnaires were used for the study. The data collected were measuredin 5-point Likert scale with a hypothesized mean of 3.00. The data analysis revealed that trade associationspracticed pro-competitive and anti-competitive roles with overall mean score of 1.9516 and 4.0824 respectively.The test of hypothesis using two sample z-tests indicated that the z-calculated value for differences in the twomean scores was 130.6724 with a significance (one-tail) probability of less than 0.0001 which is less than thecritical value of 0.05. Consequently, it was concluded that the extent of practice of anti-competitive roles wassignificantly higher than the extent of practice of pro-competitive roles by the trade associations in Nigeria’s roadtransport industry. This study also found that major roles of trade associations on entrepreneurial development inNigeria’s Road Transport Industry were anti-competitive while pro-competitive roles were considered to be minorroles of the trade associations.

INTRODUCTION

Entrepreneurial ideas began to grow out oftechnology centres, even though there were noofficial laws to support individual proprietorshipin most countries. Entrepreneurship is definedas an individual initiative based on organizingone or more people’s personal property in a pri-vate business for the purpose of receiving in-come in exchange for accepting risk associatedwith the use of the personal property. The pur-suit of entrepreneurship and small businessownership in emerging economies, is often madedifficult because of “resistance to change with-in the government, religious, business, and so-cial institutions; failing energy, transportation,educational and healthcare infrastructure; un-derdeveloped legal and financial systems; re-strictive and inconsistent taxation, high interest

rates and inflation and a lack of managementskills” (Luthans and Ibrayeva 2010).

Trade associations play valuable, fundamen-tal roles as forums for the discussion and ex-change of views on important issues of com-mon interest for the transport industry sectorwhich they represent. Many trade associations’activities should be supported and encouraged,because they promote the efficient functioningof the market (Oshin 1990). Trade associationsconsist of individuals and firms with commoncommercial interests, joining together to furthertheir commercial or professional goals. The im-portant role played by trade associations inmodern economies is widely recognized. Theiractivities benefit their members-especially thesmaller members, and may also be beneficial inincreasing the efficiency of the market (Euro-found 2011). Although their principal function

46 P. C. UGBOAJA, C. ONYEMECHI, E. A. EJEM ET AL.

is to provide services to their members, tradeassociations also have important industrial pol-icy and political functions. Most trade associa-tions take an active role in shaping the way theirindustry works. They promote product stan-dards and best practices, and they define andpromote standard terms and conditions of sale(Newspaper Association of America 2008). Theypublish and enforce codes of ethics and in somecases they formulate and enforce industry self-regulation. They issue recommendations to theirmembers on a variety of commercial and non-commercial issues. Trade associations also pro-mote, representing and protecting the interestsof members on legislation, regulations, taxationand policy matters, which may likely affect them(Ugboaja et al. 2013)

Many trade association activities benefit fromstatutory and non-statutory exemptions or im-munities from the application of competitionrules, which enables them to perform these ben-eficial roles. In many countries, the existenceand some of the activities of trade associationsare protected by fundamental rights of freedomof association and expression and the right tofreely petition the government (Procassini 1995).In order to prevent conflicts between these fun-damental rights and competition policy objec-tives, many jurisdictions have exempted a num-ber of trade association activities from the appli-cation of competition rules. However, these ex-emptions are generally interpreted narrowly, be-cause accommodating these values may some-times also impose costs on consumers. A funda-mental right of individuals and corporations isthe right to associate freely or to join an existingassociation (Eurofound 2011). An important con-sequence of this right is that membership andparticipation in the activities of a trade associa-tion should not be viewed as a violation of anti-trust rules as such or as sufficient evidence toprove an antitrust conspiracy. Trade associa-tions and their members cannot be held liableunder the antitrust statutes simply for exercis-ing a fundamental and constitutionally protect-ed right. This is so even if active participation ina trade association may provide the ‘opportuni-ty’ for unlawful agreements. One of the primaryfunctions of trade associations is to build con-sensus among the members on public policy is-sues, which affect the industry and to promotethese policy interests with the government andwith other public institutions (Procassini 1995).

Such activity, however, may level the playingfield among the members of the association andto a certain extent limit competition in the indus-try. In order to preserve the associations’ rightto petition governments, some jurisdictions haveexempted them from antitrust liability concertedefforts to secure government-imposed restraintson competition. For competitors to lobby thegovernment to change the law in a way that wouldreduce competition cannot be a violation of theantitrust laws, unless the concerted action is amere ‘sham’ to cover what is actually nothingmore than an attempt to interfere directly withthe business relationships of a competitor.Many activities of trade and professional asso-ciations are established by law or find their jus-tification in public policies (Venter and Levy2011). Some associations are expressly givenpowers by a public entity to set prices or otherterms and conditions for exercising a commer-cial activity (for example, meeting certain stan-dards or certification requirements). The publicentity in some cases is also asked to approve orveto a resolution by the industry association.The question is whether such activities, whichcan entail serious price or output restrictions onthe members of the associations, should be sub-ject to antitrust scrutiny although they are com-pelled or authorized by law. In many countries,courts have concluded that no antitrust liabilitycan be found if the challenged private conduct(including conduct by trade associations) isdetermined by lawful public measures (Grogan2009). Under the so called “state action” or “reg-ulated conduct” doctrines, companies are notliable under the antitrust statutes if their anti-competitive behavior is required by a publicmeasure and companies have no space for au-tonomous conduct.

Trade associations may offer opportunitiesfor direct competitors to meet repeatedly. Thiscould easily spill over into illegal and anticom-petitive activities and favour collusion and co-ordinated exclusionary conduct. Trade associa-tions remain by their very nature exposed toantitrust risks, despite their many precompeti-tive aspects (Luthans and Ibrayeva 2010). Par-ticipation in trade and professional associations’activities provide ample opportunities for com-panies in the same line of business to meet reg-ularly and to discuss business matters of com-mon interest. Such meetings and discussions,even if meant to pursue legitimate association

KNOWLEDGE ASSUMPTIONS AMONG DOCTORAL STUDENTS 47

objectives, bring together direct competitors andprovide them with regular opportunities for ex-changes of views on the market, which couldeasily spill over into illegal coordination (Trip-athi 2009). Casual discussions of prices, quanti-ties and future business strategies can lead toagreements or informal understandings in clearviolation of antitrust rules. It is for this reasonthat trade associations and their activities aresubject to close scrutiny by competition author-ities around the world. Although there is a wideconsensus on the fact that trade associationsshould be subject to competition rules, if onlyto avoid members escaping antitrust enforce-ment by acting through the intermediary of theassociation, the role of a trade association in theinfringement may vary significantly, like its lia-bility for the anti-competitive conduct. Membersof an association that create it would be respon-sible for restrictions in the act of incorporationor in by-laws of the association (for example,anti-competitive membership criteria). The as-sociation itself, however, may be responsiblealongside its members if it had a separate role insuggesting, orchestrating or executing an ille-gal conduct (Bendix 2010). No liability shouldbe imposed on the association if the illegal con-duct is put in place by the members without theassociation being aware of it. The traditional ar-eas of concern about trade associations are pricefixing, allocation of customers or territories andbid-rigging. Naked price fixing or customer allo-cation conspiracies orchestrated by a trade as-sociation are becoming rarer, though. Competi-tion enforcement is increasingly focused ontrade associations’ practices that facilitate col-lusion among the members (Ugboaja et al. 2013).Unduly restrictive membership rules, exchangeof detailed and sensitive commercial informa-tion, exclusive or closed industry standards, mar-keting restrictions and ethical codes regulatingpricing or other trading practices that limit themembers’ ability to compete freely are amongthe antitrust-sensitive issues which mostly af-fect the activities of trade associations today(Olubomehin 2012).

Associations may be liable for antitrust in-fringements, but the application of competitionrules to associations may raise specific issueswhen it comes to determining and assessingmonetary sanctions. In most jurisdictions, theinfringement of competition laws exposes theparticipants to sanctions and penalties. Trade

associations are not immune from the conse-quences of an antitrust infringement, and whenthey are responsible for organizing and execut-ing the infringement, they can be subject to finesseparately from the members. This has raisedpractical difficulties in practice, as fines to tradeassociations based on the trade association turn-over may not achieve the necessary deterrenteffect, not only towards the association con-cerned (specific deterrence) but also towardsother associations engaged in practices that arecontrary to competition laws (general deterrence)(Ugboaja et al. 2013).

Research Question

What are the major roles of trade associa-tions on entrepreneurial development in Nige-ria’s road transport industry?

Research Objectives

The study attempts to explore the role oftrade associations on entrepreneurial develop-ment in Nigeria’s Transport Industry. The fol-lowing specific objectives shall be examined:

1. To substantiate the role of trade associa-tions in entrepreneurial development of roadtransport industry.

2. To determine trade associations alternativesin response to the economic, environmen-tal and social consequences of entrepre-neurial development.

Hypothesis

The extent of practice of anti-competitiveroles is not significantly higher than the extentof practice of pro-competitive roles by trade as-sociations in Nigeria’s road transport industry.

Literature Review

Scholars generally agree that transport oc-cupies an important place in the process of eco-nomic development (Norton 1963; Camemark1979; Mallon 1980; Olanrewaju and Falola 1986;Olukoju 1996). For this reason, researchers haveshown considerable interest in transport stud-ies. In Nigeria however, previous studies on thesubject of transport have tended to concentrateon the physical and infrastructural aspects ofthe transport system. For example, Njoku (1979)


and Olubomehin (2001) looked at the physicaldevelopment of road infrastructure in Easternand Western Nigeria respectively. The other as-pects of road transportation that researchershave studied include the issue of rail road com-petition (Oshin 1990, 1991), the geography ofroad transportation (Hay 1968) and road trans-portation as a business enterprise (Hawkins1958). The exception to this trend is the studyby Drummond-Thompson (1993) which focusedon the rise of entrepreneurs in Nigerian trans-port industry. In spite of this, one can still saythat there has been a general neglect of the studyof the role and impact of the entrepreneurial de-velopment in Nigeria’s transport industry. Forinstance, currently, the number of road trans-port entrepreneurs in Nigeria is more than 1.5million. Given their number, the group exerts aconsiderable influence on the country’s econom-ic life. Yet this impact is often over-looked. Thisstudy attempts to fill this gap. It provides a his-torical documentation of the roles and impact ofthe road transport entrepreneurs on the Nigeri-an economy since the early decades of the colo-nial period. The concern of this paper is not totalk about how roads were constructed or howroad constructions were financed. This paper isalso not concerned about road networks or thevehicles which plied the roads; rather the inter-est of this paper is to look at the operators in theroad transport sector, their organization and im-pact on the economy. This is an important wayin which this paper differs from previous stud-ies on road transportation in Nigeria.

Nigeria got her independence in 1960. Fromthis date up to the present time, Nigeria wasruled at different times by both the civilians andthe military government. The period providesan opportunity for the nation to look at the di-mension of continuity, change and adaptationin the examination of the role of the road trans-port within the Nigerian economy (Ugboaja andUkpere 2010). One important area in which theroad transport have continued to impact on theeconomy since 1960 is in the provision of em-ployment opportunities for many Nigerians. Thisis a very important impact in a country whichovertime has found it difficult to proffer ade-quate and lasting solution to the high rate ofunemployment in the economy. Particularly sincethe 1980s, unemployment has led to widespreadpoverty, increased crime rate and frustration with-in the country (Ukpere 2013). Frustration arising

from unemployment has been linked with thevarious aggressive behaviours prevalent in thesociety, including the menace of kidnappingcurrently confronting the country (Olubomehin2012).

In this particular regard, the road transporthas made significant contributions towards re-ducing the rate of unemployment in the country.It is estimated that over 1.5 million people aretoday engaged in the road transport sector(Mobolaji et al. 2011; Ugboaja et al. 2013). Animportant change in this regard is the increasingnumber of university and polytechnic graduatesamong the membership of the road transportbusiness. Since the 1980s, the austerity condi-tion in the country and the difficulty of gettingoffice jobs have driven many to seek employ-ment in the road transport sector. This is a gooddevelopment for the economy because it meansthat people are becoming self-employed unlikein the past when young graduates had to waitfor white-collar jobs in the towns and cities (Ade-kunle and Kasumu 2005).

A very good example is the Eastern Nigeriabased transporter, Mr. Frank Nneji who is theowner of the popular transport service knownas Associated Bus Company Ltd. (ABC Trans-port). The company operates on routes not onlywithin the country but also along the West Afri-can sub-region. Mr. Nneji is a Biology graduatefrom a Nigerian University (Adekunle and Ka-sumu 2005). His transport business is a leader inthe inter-city road transport business in Nigeria(ibid). Perhaps because of their level of educa-tion, graduates like Mr. Nneji who have goneinto the transport business appear to be doingvery well. Another positive development in thehistory of the road transport in post-colonialNigeria is the entry of big transport entrepre-neurs into the transport business in the EasternNigeria. They owned luxurious buses which plydifferent routes to the northern and western partof the country from their base in the east(Stephens and Ukpere 2011). This is a new fac-tor of change in the transport sector and indeed,in the evolving history of the road transportentrepreneurs in Nigeria. The pioneers in thisrespect included individuals like D.D. Onyeme-lukwe, J.C. Ulas, Louis Philip Ojukwu and ChiefAugustine Ilodibe the owner of the populartransport outfit known as ‘Ekene Dili Chukwu’.Other transport entrepreneurs were Chidi Ebere,Izuchukwu and Chief C.N. Okwunwa (Adekunle


and Kasumu 2005). The new entrants into theroad transport business in Eastern Nigeria in-clude the owners of Emenike Motors, MicmerahInternational Agency, G.U.O. Okeke transportservice, F.G. Onyenwe, Dan Dollars, The YoungShall Grow Motors and ABC Transport Service(Olubomehin 2012). Of these luxurious bus en-terprises, ABC Transport has witnessed a mostphenomenal growth, with the company employ-ing many Nigerians and the outfit spreading itstransport services from Nigeria to the West Afri-can sub-region.

As part of their contribution to the growthof the national economy, the road transport work-ers have continued to provide millions of nairain revenue to the government through the pay-ment of various duties for hackney permits, driv-ers’ licenses, vehicle licenses, vehicle plate num-bers and insurance, to mention just a few (Ol-ubomehin 2001). In all, one can say in this par-ticular regard that the transport entrepreneurshave served as partners with the government inthe process of national economic development.In 1978, a milestone occurred in the history ofthe road transport entrepreneurs in Nigeria withthe formation of the National Union of RoadTransport Workers popularly known as the(NURTW). Since this date, the activities of theroad transport entrepreneurs have revolvedaround the NURTW. For a paper of this nature,it will be a big omission if we do not dwell a littlebit on the structure and operations of theNURTW. The NURTW membership, broadlydefined, include individuals (mainly male), whoare involved in the use of different modes oftransport such as motorbikes (motorcycles),buses, cabs, tankers and tricycles in conveyingpassengers and goods from one destinationwithin the country to another (Ogboaja and Uk-pere 2010; Stephens and Ukpere 2011). The needfor orderliness prompted members of the sectorto form two associations, namely the RoadTransport Employers Association of Nigeria[RTEAN] and the National Union of Road Trans-port Workers [NURTW]. Though the RTEANpredates NURTW, it is less active than theNURTW, which was registered as a trade unionin 1978, and is an affiliate of the Central LabourOrganisation [CLO], now known as the NigerianLabour Congress [NLC]. While the RTEAN isless known, the NURTW has grown overtime,with its membership burgeoning on daily basis.Thus, it boasts of over “1.5 million membership

throughout the federation” (NURTW Diary 2011).With the exclusion of petroleum tanker drivers,all professional commercial drivers are automat-ic members of the Union. As such, the NURTWserves as an umbrella body for drivers operat-ing motorbikes, taxi cabs, tricycles, buses (bothintra and inter-state services), trailers and Lor-ries that engage in the conveyance of passen-gers and goods. The main objective of the Unionis to promote the economic welfare of its mem-bers (Ukpere 2007; Bendix 2010).

Given the coherent and sound administra-tive organization of the road transport trade as-sociations described above, the entrepreneurshave become partners with the government inthe process of national political and socio-eco-nomic development. The politicians usually takeadvantage of the large population of the mem-bers of road transport trade associations, whichis one of the largest that any professional unioncould boast of in the country. Not only this,because many of the road transport entrepre-neurs are very close to the people at the grassroot level, politicians often used them to influ-ence the people at that level in order to achievetheir political end. Due to the evolving rapportbetween the politicians and the road transportentrepreneurs, a particular scenario developedin the political terrain of Nigeria whereby somestate governors give officers of the NURTWwho have supported their candidature into po-litical office so much freedom to operate withinthe society. The union works actively with gov-ernment agencies to teach drivers the dangersinvolved in HIV/AIDS (Letamo 2011). The uniontherefore, contributes to the government’s ef-forts at checking the spread of the disease in thecountry. Away from health matters, the NURTWalso contributes to the society in other impor-tant respects. The union holds regular meetingswith Vehicle Inspection Officers (VIOs), the Fed-eral Road Safety Corps (FRSC) and other gov-ernment road traffic agencies. At such meetingsdrivers are told the importance of having validvehicle particulars and keeping their vehicles ingood and road worthy state. They also teachdrivers to how to behave nicely towards pas-sengers. The height of such training workshopsis usually from September of every year throughto December when there is high traffic of vehi-cles on the road (Ugboaja et al. 2013). The FRSCusually intensify its activities in teaching driv-ers to avoid over-speeding and drinking alcohol


while driving. All these, of course, have helpedto reduce accidents on the roads (Stephens andUkpere 2011). Oral evidence also shows thatmembers of the union engage in road mainte-nance particularly in areas where governmenthas failed to carry out such work. Hence, mem-bers of the NURTW can be seen filling pot holeson roads and cutting grass to aid driver’s visi-bility in corners and other dangerous spots onthe road. Of course, when such good works aredone both commercial and private vehicle own-ers benefit from the union’s community effort(Olubomehin 2012).

The foregoing analysis has been used toexplain the roles and impact of trade associa-tions in road transport on the Nigerian econo-my. The literatures reveal that through their ser-vices, the road transport industry had, and isstill contributing significantly towards the de-velopment of the Nigerian economy. In otherwords, it can be said that the road transportworkers have contributed immensely towardsthe development of the Nigerian economy. Al-though, Europeans and Levantines participatedactively in the economy, indigenous road trans-port entrepreneurs were not passive. They haveplayed a key role in the growth of the Nigerianeconomy.

METHODOLOGY

The work assessed the extent of practice ofpro-competitive roles among trade associationsin Nigeria. The focus of the research was on theimpact of these roles on entrepreneurial devel-opment of these associations in Nigeria. Ques-tionnaires were used to collect primary data re-flecting the industry’s assessment of these roles.Analysis of the result was carried out using a 5point Likert scale as well as z sample test statis-tics. The set lower acceptance limit on the Likertscale was 3.0.

RESULTS AND DISCUSSION

Extent of Practice and Roles of TradeAssociations on EntrepreneurialDevelopment in Nigeria’s Road TransportIndustry

A total of fifteen (15) roles of trade associa-tions on entrepreneurial development in Nige-ria’s transport industry were considered in thepresent study. Seven (7) of the roles (item-1 to -7) on the questionnaire are pro-competitiveroles, while the remaining eight (8) roles (item-8to item -15) are anti-competitive roles on entre-preneurial development in Nigeria’s transportindustry. Respondents’ view on the extent ofpractice of these roles by trade associations inNigeria were measured on a 5-point Likert scalewith an expected or average value of 3.00. Con-sequently, a given role was accepted to be amajor role of the trade associations if its meanscore is greater than the expected value of 3.00;otherwise, it was rejected as a major role.

Tables 1(a) and 1(b) respectively show theextent of practice of pro-competitive and anti-competitive roles by trade associations in Nige-ria’s road transport industry. From Table 1a, itwas observed that none of the seven (7) pro-competitive roles considered in the presentstudy was found to be a major role of the tradeassociations. This is because they all have meanscores less than the expected value of 3.00 on a5-point Likert scale. However, the pro-competi-tive role on entrepreneurial development in Ni-geria’s transport industry that is mostly prac-ticed by the trade associations is item-7 (con-ducts that positively influence government pol-icies) with a mean score of 2.4793. This is fol-lowed by item-3 (collection of cost index data)with a mean score of 1.1619. The overall ratingof the extent of practice of all the seven (7) pro-

Table 1a: Pro-competitive roles

Item Description Mean Std dev Obs

I t em-7 Conducts that positively influence government policies 2 .4793 1.2217 1377Item-3 Collection of cost index data 2 .3253 0.7164 1377Item-2 Conferences, workshops and seminars 2 .3224 1.7757 1377Item-6 Technical and compliance support 2 .1053 0.5704 1377Item-5 Media relations 2 .0000 0.2641 1377Item-4 Crises control 1 .2665 0.7057 1377Item-1 Commercial services, namely, legal assistance to members, insurance

and risk solutions, finance solutions and vehicle inspection services 1 .1619 0.5021 1377Overall 1 .9516 0.3970 1377


competitive roles considered in the study is1.9516, which is less than the expected value of3.00 on a 5-point Likert scale. This means thatthe extent of practice of pro-competitive roleson entrepreneurial development by trade asso-ciations in Nigeria’s road transport industry isgenerally below average.

Similarly, it was observed, from Table 1b, thatall the eight (8) anti-competitive roles consid-ered in the present study are found to play ma-jor roles of the trade associations. This is be-cause they all have mean scores greater thanthe expected value of 3.00 on a 5-point Likertscale. The anti-competitive roles on entrepre-neurial development in Nigeria’s road transportindustry that are mostly practiced by the tradeassociations are item-12 (conducts that restrictthe entry of firms into legitimate services andoperations) and item-14 (Hoarding of informa-tion provided by Government Regulatory Agen-cies) with mean score of 4.8025. They are fol-lowed by item-15 (Management guidance anddecisions that lead to restraints on competition)with a mean score of 4.2687, while the anti-com-petitive role on entrepreneurial development inNigeria’s road transport industry that is leastpracticed by the trade associations is item-9(conducts that restrict quantities) with a meansscore of 3.6412. The overall rating of the extentof practice of all the eight (8) anti-competitiveroles considered in the study is 4.0824, which isgreater than the expected value of 3.00 on a 5-point Likert scale. This means that the extent ofpractice of anti-competitive roles on entrepre-neurial development by trade associations inNigeria’s road transport industry is generallyabove average. It can therefore be concludedthat the major roles of trade associations in en-trepreneurial development in Nigeria’s roadtransport industry consist of all the eight (8)

anti-competitive roles considered in the study,while all the seven (7) pro-competitive roles con-sidered are of minor roles of trade associations.

Test of Hypothesis

The extent of practice of anti-competitiveroles is not significantly higher than the extentof practice of pro-competitive roles by trade as-sociations in Nigeria’s road transport industry.

Table 2 shows the two sample z test for dif-ferences in the extent of practice of pro-compet-itive and anti-competitive roles by trade associ-ations in Nigeria’s transport industry. The tableshows that the mean scores for the practice ofpro-competitive and anti-competitive roles bytrade associations in Nigeria’s road transportindustry are 1.9516 and 4.0824 respectively. Thismeans that trade associations in Nigeria’s roadtransport industry practice more of anti-compet-itive roles than pro-competitive roles. The z-cal-culated value for differences in the two meanscores is 130.6724 with a significance (one-tail)

Table 1 b: Anti-competitive roles

Item Description Mean Std dev Obs

I tem-12 Conducts that restrict the entry of firms into legitimate services and operations 4 .8025 0.6066 1377

Item-14 Hoarding of information provided by government regulatory agencies 4 .8025 0.6066 1377Item-15 Management guidance and decisions that lead to restraints on competition 4.2687 0.7186 1377Item-13 Unfair trade practices 4 .0015 0.4017 1377Item-11 Conducts that restrict facilities and technology 3.7306 0.5584 1377Item-8 Conducts that restrict prices 3 .7284 1.4513 1377Item-10 Conducts that restrict customers and sales channels 3 .6841 0.5522 1377Item-9 Conducts that restrict quantities 3.6412‘ 0 .6407 1377Overall 4 .0824 0.4567 1377

Table 2: Two sample z test for differences in theextent of practice of pro-competitive and anti-competitive roles by trade associations inNigeria’s Road transport industry

Variable Practice-n Practice-p

Mean 4.0824 1.9516Known variance 0.2086 0.1576Observations 1377 1377Hypothesized Mean 0 DifferenceZ-calculated 130.6724P (Z<=z) one-tail) <0.0001Z-tabulated (one-tail) 1.6449P (Z<=z) two-tail <0.0001Z-tabulated (two-tail) 1.9600


probability of <0.0001, which is less than 0.05.Thus the test is significant (one-tail) probabilityof <0.0001, which is less than 0.05. Thus the testis significance at 5% level of significance(p<0.05). We therefore reject the null hypothe-sis and accept the alternative hypothesis.

CONCLUSION

All seven indicators of pro-competitive rolechosen for the research performed below theacceptance limit scoring less than 3.0 on the Lik-ert scale. The tested roles include conducts thatpositively influence government policies with ascore of 2.4793, collection of cost index data witha score of 2.3253, conferences, workshops andseminars with a score of 2.3224, technical andcompliance support 2.1053, media relations2.0000, crises control 1.2665, while commercialservices namely, legal assistance to members,insurance and risk solutions, finance solutionsand vehicle inspection services scored 1.1619.On the other hand, all the eight anti-competitiveroles considered in the study were found to bemajor roles of the trade associations, which havemean scores above the acceptance level of3.00.The tested roles include conducts that re-strict the entry of firms into legitimate servicesand operations with a score of 4.8025, hoardingof information provided by government regula-tory agencies also scoring 4.8025, managementguidance and decisions that lead to restraintson competition 4.2687, unfair trade practices4.0015, conducts that restricts facilities and tech-nology 3.7306, conducts that restricts prices3.7284, conducts that restricts customers andsales channels 3.6841,while conducts that re-stricts quantities scored 3.6412. The tests werefound to be significant both on the one tail andtwo tail z statistics tests with a p-value of lessthan 0.0001 in either case. Consequently, weconclude that the extent of practice of anti-com-petitive roles is significantly higher than the ex-tent of practice of pro-competitive roles by tradeassociations in Nigeria’s road transport indus-try.

RECOMMENDATIONS

Based on the findings of the research, gov-ernment is therefore encouraged to focus on thefollowing roles which include, conducts that re-strict the entry of firms into legitimate services

and operations that scored 4.8025, hoarding ofinformation provided by government regulato-ry agencies which also scored 4.8025, manage-ment guidance and decisions that lead to re-straints on competition with a score of 4.2687,unfair trade practices with a score of 4.0015, con-ducts that restricts facilities and technology witha score of 3.7306, conducts that restricts priceswith a score of 3.7284, conducts that restrictscustomers and sales channels with a score of3.6841, and conducts that restricts quantitieswhich scored 3.6412.

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Role of Trade Associations on Entrepreneurial Development