Which SMEs Use External Business Advice? A Multivariate Subregional Study

Abstract

The authors examine factors that influence the propensity of a firm to take up external business support across four large English towns, using random effects nominal probit regression analysis to capture sector heterogeneity. The results suggest a strong positive association between the orientation of the firm towards growth and its propensity to use external business advice. ‘Push’ factors, including the existence of recruitment difficulties, are identified as key triggers to use business advice. These results provide valuable guidance to public policy organisations concerned with business development and competitiveness, and suggest a number of avenues for future research.

When moving information online diminishes change: advisory services to SMEs

“…The study fills a gap in the business advice literature that previously only examines the entry into advisory services rather than the way in which firms access different types of business support (Garcia-Quevedo and Mas-Verdu 2008, Robson, Jack and Freel 2008, Johnson et al 2007). Few studies show empirical regularities that point to the way firms navigate the system although many discuss the role of networking (Greve and Salaff 2003, Aldrich and Zimmer 1986, SlotteKock and Coviello 2010, Phillipson, Gorton and Laschewski 2006.…”

“…Moreover, exporting has been linked to the composition of boards of directors, which reflects advice given to the CEO, similar to a demand for advice (Gabrielsson 2007). Third, those bringing new products to market would encounter more problems, which suggests an increase in the demand for advice (Johnson, Webber and Thomas 2007); however, this would lead to a demand for external capability using advice (Branzei and Vertinsky 2006). Accordingly, we might expect this to lead to a reduced demand for our internal capability-enhancing advice.…”

Public Business Advice in the Founding Process: An Empirical Evaluation of Subjective and Economic Effects

“…Policy debate should not only focus on the supply of business advice schemes but also on (nascent) entrepreneurs' demand for these services (Johnson, Webber & Thomas, 2007).…”

“…The services and programs are very diverse in intensity and scope, covering everything from intense strategically-oriented counseling to less intensive operational advice. Given the abundant supply of assistance schemes, Johnson, Webber & Thomas (2007) point to the demand side for business support which has only attracted little interest by research so far, especially researching into the factors that influence the decision to take up and utilize external business advice.…”

“…As indicated by Table 2 our hypotheses regarding determinants of take-up and perceived usefulness run in the same direction. Since previous research considers take-up of external business advice separately (Johnson, Webber and Thomas, 2007), we conduct separate analyses regarding policy take-up (Section 4.3.1) and perceived usefulness (Section 4.3.2) so that potential determinants working in opposite directions could be detected.…”