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The Use and Impact of Business Advice by SMEs in Britain: An Empirical Assessment Using Logit and Ordered Logit Models

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  • Robert Bennett
  • Paul Robson

Abstract

This paper assesses the effect of differences in types of client on the use and impact of business advice by SMEs in Britain using new survey evidence from the Cambridge ESRC Centre for Business Research Survey of 1997. The survey, covering over 2500 respondents, is the largest and most definitive assessment available in Britain. Moreover, the survey allows an assessment of the full range of the providers of external advice, the private sector, business associations and various public sector bodies, as well as the fields of advice. Using multivariate logit models we find that size of firm, rate of growth and innovation appear to be the main variables influencing the likelihood of firms seeking external advice, both from different sources and from different fields. Other variables which are investigated include, age, profitability, skill levels, manufacturer/services, and exporter/non-exporter. Ordered logit models of the impact of the advice demonstrate that there are significant differences between clients' perceived impact of advice and the sources of advice they use, chiefly as a result of firm size, and to a lesser extent for growth, innovation and export levels.

Suggested Citation

  • Robert Bennett & Paul Robson, 1999. "The Use and Impact of Business Advice by SMEs in Britain: An Empirical Assessment Using Logit and Ordered Logit Models," Working Papers wp143, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp143
    Note: PRO-1
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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. David A. Kirby & JONES-EVANS DYLAN, 1997. "Small Technology-based Professional Consultancy Services in the United Kingdom," The Service Industries Journal, Taylor & Francis Journals, vol. 17(1), pages 155-172, January.
    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. Bryson, John R & Keeble, David & Wood, Peter, 1997. "The Creation and Growth of Small Business Service Firms in Post-industrial Britain," Small Business Economics, Springer, vol. 9(4), pages 345-360, August.
    5. Robert Bennett & Paul Robson, 1999. "The Market for External Business Advice Services in Britain," Working Papers wp123, Centre for Business Research, University of Cambridge.
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    Cited by:

    1. Maurizio Cisi & Francesco Devicienti & Alessandro Manello & Davide Vannoni, 2016. "The Impact of Formal Networking on the Performance of SMEs," Working papers 039, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    2. Vivas-Augier, Carlos & Barge-Gil, Andrés, 2012. "Impact on firms of the use of knowledge providers: a systematic review of the literature," MPRA Paper 41042, University Library of Munich, Germany.
    3. D.J. Webber & S. Johnson & S. Fargher, 2010. "Sector Variations in SMEs’ Use of External Business Advice," Local Economy, London South Bank University, vol. 25(4), pages 339-355, June.
    4. Jeremy Phillipson & Matthew Gorton & Marian Raley & Andrew Moxey, 2004. "Treating Farms as Firms? the Evolution of Farm Business Support from Productionist to Entrepreneurial Models," Environment and Planning C, , vol. 22(1), pages 31-54, February.
    5. Anoosheh Rostamkalaei & Mark Freel, 2017. "Business advice and lending in small firms," Environment and Planning C, , vol. 35(3), pages 537-555, May.
    6. Jonathan M Scott & David Irwin, 2009. "Discouraged Advisees? The Influence of Gender, Ethnicity, and Education in the Use of Advice and Finance by UK SMEs," Environment and Planning C, , vol. 27(2), pages 230-245, April.
    7. Kevin Mole, 2002. "Street-Level Technocracy in UK Small Business Support: Business Links, Personal Business Advisers, and the Small Business Service," Environment and Planning C, , vol. 20(2), pages 179-194, April.
    8. 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.
    9. 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.
    10. Norin Arshed & Colin Mason & Sara Carter, 2016. "Exploring the disconnect in policy implementation: A case of enterprise policy in England," Environment and Planning C, , vol. 34(8), pages 1582-1611, December.
    11. Colin Wren, 2002. "Evaluating the effect of soft business support upon small firm performance," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 334-365, April.
    12. Luminița Nicolescu & Mariana Nicolae & Irina Ion, 2014. "Factors influencing the consultancy services used in Romanian family businesses," Management & Marketing, Economic Publishing House, vol. 9(2), Summer.
    13. Barge-Gil, Andrés & Vivas-Augier, Carlos, 2019. "Does Cooperation with Universities and KIBS Matter? Firm-level Evidence from Spain," MPRA Paper 96949, University Library of Munich, Germany.
    14. Venetoklis, Takis, 2001. "Business Subsidies and Bureaucratic Behaviour," Research Reports 79, VATT Institute for Economic Research.
    15. Robert Bennett & Paul Robson, 2000. "The Small Business Service: Business Support, Use, Fees And Satisfaction: Econometric Estimates," Working Papers wp181, Centre for Business Research, University of Cambridge.
    16. 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.
    17. Robert Bennett & Paul Robson, 2003. "Changing Use of External Business Advice and Government Supports by SMEs in the 1990s," Regional Studies, Taylor & Francis Journals, vol. 37(8), pages 795-811.
    18. Parker, Simon C., 2008. "The economics of formal business networks," Journal of Business Venturing, Elsevier, vol. 23(6), pages 627-640, November.
    19. Venetoklis, Takis, 2001. "Business Subsidies and Bureaucratic Behaviour - A Revised Approach," Research Reports 83, VATT Institute for Economic Research.

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