This research seeks to contribute towards the understanding of economic linkage within the rural context by exploring the relationship between rurally located small to medium-sized enterprises (SMEs) and their purchase of producer (business) services. In addition, the work considers other inter-rural and intra-rural differences, in both firm (SME) behaviour and firm characteristics. Whilst the subject of linkages has been explored by other researchers, the market town and SME focus of this thesis provides a more spatially contained framework than is often encountered within this type of research. By using four towns of similar size and structure contained within two noticeably different counties, the work is able to explore difference within the rural setting. Given its emphasis on market towns, rural areas, SMEs, the service sector and indigenous growth potential, the work contributes to current debates in both academia and in national and European government policy. The underlying hypothesis is that integration, in terms of local spending on producer services, is a function of a firm's characteristics. In order to test this hypothesis, data was collected from four rural towns, and a logistic regression model was constructed using variables that described both firms' characteristics and proportion of spend on services in their resident town. The model was then tested using data collected firom a further two towns. This thesis shows that there is a relationship between a firm's characteristics and the location of the firm's producer service spending, enhancing our understanding of firms operating within the rural context. Key characteristic variables that are shown to have a relationship with producer service spend location are: firm Standard Industrial Classification (SIC), size (in terms of total sales, total number of hours worked by all staff), total spend on producer services by firm and distance that the current location is from the firm's previous location. Given the changing role and nature of rural firms, this research provides timely information concerning the relationship between firms and service providers.

This study provides a better understanding of the interactions between firm resources, strategy choice, marketing environment, and performance in rural SMEs. To date, a strategy framework specifically for SMEs in developing countries had not been developed. Past studies adapted the Miles and Snow (1987) strategy typologies or have developed strategy types for SMEs in developing countries only conceptually. This study extended the modelling approach adopted by DeSarbo et al., (2005, 2006) by empirically deriving a strategy typology specifically for SMEs in a developing country. Based on K-means clustering of theoretically relevant strategy dimensions, two strategy clusters were identified??lower performing conservative strategy A, and higher performing customer oriented strategy B. The issue of resource limitations in strategy formulation had not been adequately addressed by past studies on SME strategy. By examining how and to what extent objective and perceived dimensions of the external environment impact the resources-strategy-performance (RSP) links in rural SMEs, the study tested the applicability of the Resource-Based View (RBV) and the Knowledge-Based View (KBV) in a new context??that of rural SMEs in a developing country. Both RBV and KBV were supported by the findings. Key strategic resources in rural SMEs were explored for its strategic and performance implications. General resources and capabilities, knowledge-based resources, and in particular ??tacit?? marketing knowledge, were examined in an aggregated sense through the intuitive understanding within the one SME owner-manager. Strategy choice moderated and mediated the resource-performance relationship. SMEs with higher levels of resources and capabilities tended to adopt the higher performing strategy B. The study provided further insights on the kinds of knowledge that mattered. Knowledge-based resources that were more tacit in character determined strategy choice and performance??higher customer serving skills led to adopting the higher performing strategy B, while planning skills led to adopting the lower performing strategy A. Both the objective and perceived environments influenced SME performance by moderating the resource-strategy-performance relationship. SMEs located in more munificent provinces perceived their market environment accurately, possessed higher knowledge-based resources, and were more likely to adopt the higher performing strategy B.