Geodesy

Marketing

Benchmark (surveying)

Ecology

Biology

Identification (biology)

Statistics

Face (sociological concept)

Economics

Botany

Business

Competition (biology)

Mathematics

Geography

Entrepreneurship

Political science

Econometrics

Sociology

Sample size determination

Industrial organization

Finance

Equity (law)

Social science

Small Business Economics

This article aims to capture the relationship between perceived growth barriers and firm size. This aim is pursued by developing a novel data-driven identification strategy that assigns firm size groups based on their statistical relationships to perceived growth barriers. The analysis is undertaken using data for approximately 44,000 Swedish SMEs (0–249 employees) for 2011, 2014, and 2017. The results suggest that small firms typically face constraints on equity financing, whereas larger firms face barriers regarding competition and recruitment. As a benchmark, the performance of the developed method is compared with prevailing strategies that use ad hoc firm size groups. The findings show that ad hoc groups fail to accurately capture size thresholds at which firms incur barriers, and they yield a consistently lower model fit compared with the method proposed here. Consequently, there may be a need for methodological rethink in the field regarding the treatment of firm size.

Firm size and growth barriers: a data-driven approach