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Intensity of Interaction in Suppy of Business Advice and Client Impact: A Comparison of Consultancy, Business Associations and Government Support Initiatives for SMEs

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  • Robert Bennett
  • Paul Robson

Abstract

This paper assesses the supply of business advice using new empirical evidence from a large scale survey of SMEs. The chief focus of the paper is on a comparison of suppliers that operate in different environments of regulation, contract and reputation. The paper argues that interaction intensity varies with the level of information asymmetry of these different environments, between different types of service supplier and their clients. Interaction intensity between suppliers also varies as a result of the level of trust they enjoy: for example, the low trust enjoyed by consultants appears to encourage higher intensity of interaction which improves the tailoring of the service to the client's needs and enhances impact. The paper assesses interaction intensity using the existence of site visits and/or a written brief/contract as indicators. Although these measures have limitations, the paper demonstrates clear and significant differences between suppliers in terms of interaction intensity, use of contracts and impact in three broad categories: private sector consultancy (low trust, high intensity, high impact), business associations (high trust, low intensity, moderate impact) and government support agencies (moderate trust, moderate to high intensity, moderate or low impact). Multivariate estimation methods demonstrate that significant differences in interaction intensity, use of contracts and impact by client type are much less important than differences in supplier type. This indicates that suppliers generally develop more into niche service fields or groups of services rather than niches related to types of firm.

Suggested Citation

  • Robert Bennett & Paul Robson, 1999. "Intensity of Interaction in Suppy of Business Advice and Client Impact: A Comparison of Consultancy, Business Associations and Government Support Initiatives for SMEs," Working Papers wp142, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp142
    Note: PRO-1
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    References listed on IDEAS

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    1. Robert J. Bennett & Paul J. A. Robson, 1999. "The use of external business advice by SMEs in Britain," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 11(2), pages 155-180, April.
    2. Michael Taylor & Sara Singleton, 1993. "The Communal Resource: Transaction Costs and the Solution of Collective Action Problems," Politics & Society, , vol. 21(2), pages 195-214, June.
    3. Robert J. Bennett, 1998. "Business associations and their potential contribution to the competitiveness of SMEs," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 10(3), pages 243-260, January.
    4. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(4), pages 659-679.
    5. Praveen R. Nayyar, 1990. "Information asymmetries: A source of competitive advantage for diversified service firms," Strategic Management Journal, Wiley Blackwell, vol. 11(7), pages 513-519, November.
    6. John R. Bryson, 1997. "Business service firms, service space and the management of change," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 9(2), pages 93-112, January.
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    Cited by:

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    2. Paul J A Robson & Sarah L Jack & Mark S Freel, 2008. "Gender and the Use of Business Advice: Evidence from Firms in the Scottish Service Sector," Environment and Planning C, , vol. 26(2), pages 292-314, April.
    3. Sandeep Goyal & Bruno S. Sergi & Amit Kapoor, 2017. "Evaluating the BDS Providers and MSMEs: Challenges and Strategic Actions," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(4), pages 725-744, August.
    4. Knockaert, Mirjam & Bjornali, Ekaterina S. & Erikson, Truls, 2015. "Joining forces: Top management team and board chair characteristics as antecedents of board service involvement," Journal of Business Venturing, Elsevier, vol. 30(3), pages 420-435.
    5. Izushi, Hiro, 2003. "Impact of the length of relationships upon the use of research institutes by SMEs," Research Policy, Elsevier, vol. 32(5), pages 771-788, May.
    6. Robert Bennett & William Bratton & Paul Robson, 2000. "Business Advice: The Influence of Distance," Regional Studies, Taylor & Francis Journals, vol. 34(9), pages 813-828.
    7. Kevin Mole & David North & Robert Baldock, 2017. "Which SMEs seek external support? Business characteristics, management behaviour and external influences in a contingency approach," Environment and Planning C, , vol. 35(3), pages 476-499, May.
    8. Marta Gancarczyk, 2010. "System wsparcia dla przedsiębiorców - doświadczenia brytyjskie," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 41-60.
    9. Kurnia, Sherah & Choudrie, Jyoti & Mahbubur, Rahim Md & Alzougool, Basil, 2015. "E-commerce technology adoption: A Malaysian grocery SME retail sector study," Journal of Business Research, Elsevier, vol. 68(9), pages 1906-1918.
    10. Idris, Bochra & Saridakis, George, 2018. "Local formal interpersonal networks and SMEs internationalisation: Empirical evidence from the UK," International Business Review, Elsevier, vol. 27(3), pages 610-624.
    11. Andrés Barge-Gil & Aurelia Modrego-Rico, 2013. "Relationships Among Technology Institutes and Firms: Are Determining Factors Dependent on the Type of Service Provided?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(4), pages 343-369, December.
    12. Nabil Ghantous, 2015. "Re-examining encounter intensity's conceptualisation, measurement and role," The Service Industries Journal, Taylor & Francis Journals, vol. 35(5), pages 237-254, March.
    13. Kevin Mole & Mark Hart & Stephen Roper & David Saal, 2008. "Differential Gains from Business Link Support and Advice: A Treatment Effects Approach," Environment and Planning C, , vol. 26(2), pages 315-334, April.
    14. Kevin Mole & Robert Baldock & David North, 2013. "Who Takes Advice? Firm Size Threshold, Competence, Concerns and Informality in a Contingency Approach," Research Papers 0009, Enterprise Research Centre.
    15. Liang Han & Alan Benson, 2010. "The Use and Usefulness of Financial Assistance to UK SMEs," Environment and Planning C, , vol. 28(3), pages 552-566, June.
    16. Robert J. Bennett & Colin Smith, 2004. "SPATIAL MARKETS FOR CONSULTANCY TO SMEs," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 95(4), pages 359-374, September.
    17. Piet H. Pellenbarg & Paul J. M. Van Steen, 2004. "The Netherlands in Maps," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 95(3), pages 355-355, July.

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