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Business Advice: The Influence of Distance


  • Robert Bennett
  • William Bratton
  • Paul Robson


This paper examines the external advisors used by small businesses to help them solve their problems, focusing on distance between client and advisor. The analysis is based on a new stratified random sample survey of small businesses in manufacturing and services in five representative locations in Britain. The paper reports the distance between client and advisor, cost and extent of site visits by the advisor, focusing on differences between types of advisor, fields of advice, types of firm by size and sector, and types of location. The analysis demonstrates the importance of localization: 60.5% of advisors are drawn from within 10km of the client, and 81.5% from within 25km. The high degree of localization is shown to be chiefly dependent on accessibility and advisor location. The general pattern of client-advisor relations is demonstrated to be modelled accurately by a standard spatial interaction model. A key finding is that the spatial pattern of the location of the supply of advisors, particularly the size of the business centres in which they are located, must be taken into account simultaneously with the role of distance in order to explain the pattern of choice of business advisors.

Suggested Citation

  • Robert Bennett & William Bratton & Paul Robson, 2000. "Business Advice: The Influence of Distance," Working Papers wp167, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp167
    Note: PRO-1

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    References listed on IDEAS

    1. repec:hrv:faseco:33077889 is not listed on IDEAS
    2. Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
    3. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
    4. Geoffrey M. Hodgson, 1998. "The Approach of Institutional Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 166-192, March.
    5. Fabrizio Barca & Katsuhito Iwai & Ugo Pagano & Sandro Trento, 1998. "The Divergence of the Italian and Japanese Corporate Governance Models: The Role of Institutional Shocks," CIRJE F-Series CIRJE-F-32, CIRJE, Faculty of Economics, University of Tokyo.
    6. repec:mes:jeciss:v:30:y:1996:i:4:p:1212-1216 is not listed on IDEAS
    7. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817, June.
    8. Williamson, Oliver E, 1994. "Evaluating Coase," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 201-204, Spring.
    9. Ugo Pagano, 1999. "The Origin of Organizational Species," Working Papers wp118, Centre for Business Research, University of Cambridge.
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    Cited by:

    1. repec:pal:eurjdr:v:29:y:2017:i:4:d:10.1057_s41287-016-0058-z is not listed on IDEAS
    2. Vásquez-Urriago, Ángela Rocío & Barge-Gil, Andrés & Modrego Rico, Aurelia, 2016. "Science and Technology Parks and cooperation for innovation: Empirical evidence from Spain," Research Policy, Elsevier, vol. 45(1), pages 137-147.
    3. 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.
    4. Schwartz, Dafna & Bar-El, Raphael, 2002. "Targeted consultancy services as an instrument for the development of rural SMEs - a brazilian case," ERSA conference papers ersa02p200, European Regional Science Association.
    5. Edward Shinnick, 2002. "Identifying Spatial Markets for Personal Legal Services in Ireland," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 147-155.
    6. El-Sahli, Zouheir & Gullstrand, Joakim & Olofsdotter, Karin, 2017. "The Internal and External Effects of Offshoring on Job Security," Working Papers 2017:14, Lund University, Department of Economics.

    More about this item


    Business services; Business consultancy; Business networks; Localization;

    JEL classification:

    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
    • L89 - Industrial Organization - - Industry Studies: Services - - - Other


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