López, Oma S.
A icle
Unlocking egional economic g ow h: How indus y sec o
and mesoeconomic de e minan s in luence small i m
scaling
Economies
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MDPI – Mul idisciplina y Digi al Publishing Ins i u e, Basel
Sugges ed Ci a ion: López, Oma S. (2025) : Unlocking egional economic g ow h: How indus y
sec o and mesoeconomic de e minan s in luence small i m scaling, Economies, ISSN 2227-7099,
MDPI, Basel, Vol. 13, Iss. 5, pp. 1-21,
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Ci a ion: López, O. S. (2025).
Unlocking Regional Economic
G ow h: How Indus y Sec o and
Mesoeconomic De e minan s
In luence Small Fi m Scaling.
Economies,13(5), 138. h ps://doi.o g/
10.3390/economies13050138
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A icle
Unlocking Regional Economic G ow h: How Indus y Sec o and
Mesoeconomic De e minan s In luence Small Fi m Scaling
Oma S. López
Depa men o O ganiza ion, Wo k o ce, and Leade ship S udies, Texas S a e Uni e si y, Round Rock, TX 78665,
USA; [email p o ec ed]
Abs ac : Unde s anding he d i e s o egional economic g ow h equi es examining
he mesoeconomic condi ions ha in luence he abili y o small i ms o scale. This s udy
in es iga es how he local composi ion o i ms—by size and sec o —along wi h socio-
economic and geog aphic cha ac e is ics, a ec s he p e alence o Scaled Fi ms ac oss
U.S. labo ma ke a eas. Using c oss-sec ional da a om 2022, he analysis applies a
log-linea eg ession model o examine he ela ionship be ween he densi y o mic o,
midsize, and la ge i ms and he sha e o Scaled Fi ms (de ined as employing 5–99 wo ke s)
wi hin indus y sec o s. Co a ia es include household weal h, educa ional a ainmen ,
unemploymen , popula ion di e si y, and me opoli an classi ica ion. The esul s show
ha he p esence o midsize and la ge i ms, along wi h egional human capi al and
economic con ex , is signi ican ly associa ed wi h highe le els o small i m scaling. These
indings sugges ha he mesoeconomic con ex plays an impo an ole in shaping egional
economic g ow h ou comes and ha he composi ion o local i m ecosys ems may in luence
a egion’s capaci y o esilience and inclusi e de elopmen .
Keywo ds: egional economic g ow h; i m scaling; mesoeconomics; labo ma ke s; small
business de elopmen ; human capi al; economic de elopmen policy; c oss-sec ional
analysis
JEL Classi ica ion: R11; R58; L26; O43; L25
1. In oduc ion
Scaling small businesses is i al o egional economic de elopmen , as small and
midsize en e p ises (SMEs) play a key ole in job c ea ion and inno a ion, pa icula ly in
de eloping and eme ging economies. In he con ex o business, scaling e e s o a i m’s
abili y o g ow e enue, ou pu , o he cus ome base a a a e ha ou paces he g ow h o
i s cos s o esou ce inpu s. This in ol es expanding ope a ions e icien ly and sus ainably,
o en h ough sys ems, s a egies, and s uc u es ha enable he i m o manage inc eased
demand wi hou a p opo ional inc ease in expenses (Co iello e al.,2024).
As hese i ms expand, hey gene a e employmen oppo uni ies while di e si ying
and s eng hening local economies, making hem mo e esilien (Wen & Fang,2024). Small
i ms a e o en hubs o inno a ion, in oducing new p oduc s and se ices ha enhance
egional compe i i eness in bo h na ional and global ma ke s (Tula e al.,2024). Thei
g ow h s imula es local supply chains, c ea ing posi i e spillo e e ec s o o he busi-
nesses. Fu he mo e, he ax e enue gene a ed by expanding small i ms suppo s egional
in as uc u e, educa ion, and social se ices, ein o cing he b oade economy (Tippmann
e al.,2023). The e o e, policies and s a egies ha p omo e he g ow h o small i ms ha e
he po en ial o deli e subs an ial long- e m economic bene i s o en i e egions.
Economies 2025,13, 138 h ps://doi.o g/10.3390/economies13050138
Economies 2025,13, 138 2 o 21
1.1. Mic o-, Meso-, and Mac oeconomic Pe spec i es on Scaling Small Fi ms
Unde s anding wha ac o s in luence small i m scaling equi es dis inguishing
among mic oeconomic, mesoeconomic, and mac oeconomic pe spec i es, as each high-
ligh s dis inc de e minan s o g ow h (Aud e sch e al.,2024). The mic oeconomic pe spec-
i e ocuses on in e nal i m cha ac e is ics, such as managemen expe ise, en ep eneu ial
skills, o ganiza ional s uc u e, access o inance, and ope a ional e iciency. I examines
i m-le el decisions and beha io s ha di ec ly a ec g ow h, wi h esea ch showing ha
s ong leade ship and inno a ion inc ease a i m’s likelihood o scaling. In con as , he
mac oeconomic pe spec i e looks a b oade economic condi ions, including na ional poli-
cies, in e es a es, in la ion, ma ke access, and in e na ional ade. These ac o s shape he
business en i onmen and p o ide oppo uni ies o business in es men and expansion.
Howe e , his iew o en o e looks egional condi ions ha can impac a i m’s scaling
abili y (Dop e e al.,2004).
He e, he mesoeconomic pe spec i e b idges he gap be ween he mic oeconomic
and mac oeconomic domains by ocusing on local and egional sec o -speci ic ac o s,
condi ions and s uc u es ha in luence small i m scaling (Elsne & Hein ich,2011). In
doing so, mesoeconomic esea ch a his le el o analysis cap u es he in e media e o ces
shaping indi idual pe cep ions, which, in u n, o m he ounda ion o en ep eneu
a i udes, subjec i e no ms, and beha io s ha acili a e scaling wi hin a egional con ex
(O em e al.,2020).
1.2. Guiding Resea ch Ques ions
In explo ing he g ow h po en ial o small i ms, he cu en s udy i s seeks o
unde s and scalabili y ac oss di e en sec o s. In so doing, he guiding esea ch ques ion is
as ollows: How does he scalabili y o small i ms a y ac oss di e en sec o s? Findings om
his inqui y could unco e whe he some indus ies inhe en ly o e be e oppo uni ies
o small i m g ow h han o he s. Building on his, he cu en s udy hen examines he
ole o mesoeconomic ac o s ha may in luence a small i m’s abili y o scale. In his
p ocess, he guiding esea ch ques ion is as ollows: Wha mesoeconomic ac o s in luence a
small i m’s scalabili y wi hin he con ex o i s sec o ? Findings om his inqui y may iden i y
wha ac o s hinde , acili a e, o ha e no e ec on scalabili y. By add essing hese ques ions,
he cu en s udy sheds ligh on he b oade egional and sec o al condi ions ha shape
small i ms’ g ow h ajec o ies.
1.3. Impo ance o he Cu en S udy
The esea ch li e a u e on scaling small i ms has la gely emphasized mic oeconomic
ac o s, such as i m-le el cha ac e is ics and indi idual en ep eneu ai s, as well as
mac oeconomic ac o s like go e nmen policies o na ional economic condi ions (Mazzoni,
2024). Howe e , mesoeconomic de e minan s ha lie be ween he i m and he b oade
na ional economy emain unde explo ed, pa icula ly wi h espec o hei ole in scaling
small i ms. The cu en s udy is impo an because i seeks o ill his gap in he esea ch
li e a u e by in eg a ing in o one analysis a a ie y o exogenous ac o s ha s udies ha e
iden i ied sepa a ely as impo an o small i m scalabili y.
Mo e so, mesoeconomic ac o s a e o en mo e angible, ac ionable, and in luen ial
o policymake s and egional de elopmen agencies han mac oeconomic ac o s in de e -
mining whe he small i ms can success ully scale. Fo example, go e nmen s can di ec ly
in luence he local business clima e by p o iding access o in as uc u e, os e ing indus y
clus e s, o o e ing a ge ed inancial incen i es (Mazzoni,2024). By ocusing on mesoeco-
nomic de e minan s, he cu en s udy seeks o in o m and guide egional policymake s in
Economies 2025,13, 138 3 o 21
c ea ing mo e p esc ip i e e ec i e s a egies o nu u e i m scaling wi hin hei speci ic
con ex s.
1.4. Backg ound
Endogenous G ow h Theo y and New Economic Geog aphy p o ided he heo e i-
cal amewo k o his s udy in con ex ualizing selec ed mesoeconomic de e minan s o
egional economic de elopmen . A key limi a ion o neoclassical g ow h models is hei as-
sump ion o diminishing e u ns o capi al (Lucas,1988). In con as , Endogenous G ow h
Theo y emphasizes he ole o human capi al, inno a ion, and knowledge spillo e s in
sus aining long- e m economic g ow h (Rome ,1990). In so doing, he heo y posi s ha
in es men s in educa ion, esea ch and de elopmen (R&D), and echnology di usion
gene a e inc easing e u ns, he eby d i ing sus ained egional economic pe o mance
(Aghion & Howi ,2025).
Pionee ed by K ugman (1991), New Economic Geog aphy explains he spa ial con-
cen a ion o economic ac i i y h ough inc easing e u ns o scale, agglome a ion e ec s,
and anspo a ion cos s. I s co e-pe iphe y model sugges s ha economic ac i i y ends
o clus e in co e egions, while pe iphe al a eas expe ience slowe de elopmen due o
weake ma ke access and limi ed in as uc u e (Fuji a & Mo i,2005).
Building on hese heo e ical ounda ions, his s udy iden i ies key mesoeconomic
de e minan s and examines hei implica ions o policy and p ac ice in scaling small
i ms— he eby unlocking egional economic g ow h.
1.4.1. Indus ial Sec o
A small i m’s abili y o scale depends on he indus y sec o in which i ope a es.
In sec o s like elecommunica ions, manu ac u ing, and ene gy, high en y ba ie s, such
as capi al cos s and economies o scale, make scaling di icul o small i ms (H olko a
e al.,2019). Addi ionally, in capi al-in ensi e indus ies like cons uc ion, echnology,
and heal hca e, he cos s o expansion can be p ohibi i e (Li e al.,2023). Regula o y
and compliance cos s u he hinde scaling, pa icula ly in highly egula ed sec o s like
pha maceu icals and inance (N. Singh e al.,2023). Howe e , digi al echnologies o e
scaling oppo uni ies, especially in indus ies like e ail, echnology, and p o essional
se ices. Online pla o ms such as e-comme ce and cloud compu ing allow small i ms o
each global ma ke s wi h minimal in es men compa ed o adi ional sec o s ha equi e
subs an ial physical in as uc u e (Pelle ie & Clou ie ,2019).
1.4.2. Mic o Fi ms
Mic o Fi ms a e essen ial d i e s o inno a ion and job c ea ion, se ing as a “nu se y”
o businesses ha may scale in o la ge en e p ises (V. Singh,2010). Howe e , small
i m scaling is no gua an eed— he densi y o small i ms wi hin he sec o is a key ac o .
A highe concen a ion o Mic o Fi ms c ea es a compe i i e en i onmen ha os e s
inno a ion and ope a ional imp o emen s, bo h c i ical o scaling (Munyo & Veiga,2024;
O em e al.,2020).
1.4.3. Midsize Fi ms
The scaling po en ial o small i ms is also in luenced by he p esence o Midsize
Fi ms (MSFs) (Cheah e al.,2023). MSFs os e small i m g ow h by p o iding knowledge
spillo e s, such as echnical expe ise, managemen p ac ices, and indus y insigh s, which
help small i ms scale mo e e ec i ely (K aus e al.,2021;Munyo & Veiga,2024). They also
ac as cus ome s, supplie s, pa ne s, o in es o s, g an ing access o ma ke s and capi al
(Fo opoulos,2023). In so doing, he numbe and ac i i y le el o MSFs suppo s small i m
Economies 2025,13, 138 4 o 21
scaling by c ea ing s able demand and a compe i i e ye collabo a i e en i onmen (Ahsan
e al.,2021).
1.4.4. La ge Fi ms
La ge i ms can suppo he scaling o small i ms h ough hei ma ke powe , e-
sou ces, and ne wo ks. They c ea e demand o he goods and se ices p o ided by smalle
i ms (Su isno,2023) and o e oppo uni ies o knowledge and echnology ans e , which
a e essen ial o small i m g ow h (Ma ay,2021). Howe e , no all la ge i ms suppo
small i m g ow h equally. Indus ies domina ed by e ically in eg a ed businesses may
p o ide ewe scaling oppo uni ies, as hese i ms ely less on ex e nal supplie s (Xin
& Pa k,2024). In con as , sec o s wi h agmen ed alue chains o e mo e oppo uni-
ies o small i ms o g ow independen ly o collabo a e wi h la ge i ms (C ouze &
Meh o a,2020). Thus, he numbe and ype o la ge i ms in a egion a e c i ical ac o s in
de e mining small i m scaling po en ial.
1.4.5. BA+ Deg ees
A well-educa ed wo k o ce is a aluable asse o small i ms, d i ing inno a ion,
p oduc i i y, and imp o ed decision-making, which a e c ucial o scaling (A shed e al.,
2024). Employees wi h highe educa ion le els also con ibu e echnical expe ise, c ea i i y,
and p oblem-sol ing skills, essen ial in knowledge-in ensi e indus ies (Bauman & Lucy,
2021). Howe e , challenges may a ise when egions ha e a sa u a ed labo ma ke wi h
highly educa ed indi iduals. Small i ms, wi h limi ed inancial esou ces, may s uggle
o o e compe i i e sala ies o a ac and e ain op alen , leading o high u no e o
s a ing challenges (Bakh ia i e al.,2020). Addi ionally, he expec a ions o college-educa ed
employees, who o en seek g ea e ca ee ad ancemen , may no align wi h he limi ed
g ow h oppo uni ies in small i ms, u he complica ing scaling e o s (B own,2024).
1.4.6. Household Weal h
Household weal h in a egion plays a c ucial ole in small i m scaling po en ial.
Highe household weal h can lead o inc eased consume pu chasing powe , boos ing
demand o goods and se ices, which helps small i ms gene a e highe e enues and
ein es in g ow h (Malik e al.,2024). Addi ionally, egions wi h highe household weal h
ypically ha e be e inancial in as uc u e, o e ing access o en u e capi al and loans,
which is essen ial o small i ms o scale (Beli ski e al.,2023).
Howe e , high household weal h in a egion can pa adoxically inhibi he scaling o
small i ms. In egions wi h high household incomes, indi iduals may ha e less incen i e
o s a hei own businesses, as weal hie popula ions o en ha e mo e s able and secu e
income s eams which discou age isk- aking (Bouchouicha & Vieide ,2019). The a ail-
abili y o inancial capi al among weal hie indi iduals may also lead o a p e e ence o
passi e in es men s a egies, such as eal es a e o s ock ma ke in es men s, a he han
ac i e engagemen in he ope a ional challenges o s a ing and g owing a small business
(Clay on e al.,2024).
1.4.7. Unemploymen Ra e
Regional unemploymen a es can signi ican ly impac he scaling po en ial o small
i ms. High unemploymen o en leads o educed consume demand, as lowe household
incomes dec ease pu chasing powe , making scaling di icul (O’Lea y,2022). Addi ionally,
while highe unemploymen inc eases he labo pool, he skill misma ch be ween a ailable
wo ke s and he speci ic needs o small i ms can hinde inno a ion and expansion (Lee,
2017). Howe e , high unemploymen can also p esen oppo uni ies. Displaced wo ke s
may seek employmen in small i ms, o e ing businesses access o a la ge , mo e cos -
Economies 2025,13, 138 5 o 21
e icien labo o ce willing o accep lowe wages o lexible condi ions (Gup a,2024). This
lexibili y can educe ope a ional cos s, helping small i ms scale and in es in g ow h.
1.4.8. Di e si y Index
Wo k o ce di e si y can bo h bene i and challenge he scaling po en ial o small i ms,
depending on ac o s like managemen p ac ices and communica ion s a egies (Ra aqa
e al.,2022). Di e se eams b ing a a ie y o p oblem-sol ing app oaches, which can os e
inno a ion and help small i ms c ea e di e en ia ed o niche p oduc s. This di e si y
also enables i ms o be e unde s and and add ess cus ome needs, pa icula ly when
expanding in o global ma ke s. Howe e , challenges a ise when di e se eams expe ience
misunde s andings due o di e ences in language, communica ion s yles, and cul u al
no ms (Hani zadeh e al.,2024;Lane e al.,2024). Wi hou p ope managemen , hese
issues can lead o employee disengagemen and highe u no e , unde mining he s abili y
needed o scaling ope a ions.
1.4.9. Me o Type
The ype o me opoli an a ea—whe he u al, subu ban, o u ban—can in luence a
small i m’s abili y o scale. Ru al a eas o en p esen challenges such as a smalle cus ome
popula ion, limi ed skilled labo , and poo in as uc u e (e.g., in e ne and anspo a ion),
which can hinde scaling (Beckmann e al.,2021). In con as , subu ban a eas o e a
balance o access o u ban ma ke s and mo e a o dable li ing cos s bu may s ill ace skill
misma ches and compe i ion om la ge i ms (Ha man & Kea ,2024;McGuinness e al.,
2018). U ban a eas, wi h la ge cus ome popula ions, di e se labo ma ke s, and access
o c i ical in as uc u e, p o ide he mos a o able en i onmen o scaling small i ms,
o e ing esou ces like echnology hubs and inancial ins i u ions (Sapu a & Da mawan,
2023). Howe e , high ope a ing cos s in u ban a eas, such as en and wages, can s ill pose
signi ican challenges o small i ms seeking o scale hei business (Ba ne e al.,2024).
Based on his backg ound o he cu en s udy, Figu e 1shows a mul i-le el amewo k
ha places he indus y sec o and mesoeconomic de e minan s ela i e o mac o and mic o
le els o in luence. The Mac o Le el (Global, Fede al, S a e) cap u es b oad ins i u ional
and policy en i onmen s, including na ional and in e na ional economic ends, ede al and
s a e policies, and s uc u al ac o s ha shape he ope a ing con ex o i ms o all sizes.
The Meso Le el (Coun y, Region) is he ocus o he cu en s udy, and consis s o coun y
egional dynamics such as household weal h dis ibu ion, di e si y index, educa ional
a ainmen (% BA+ deg ees), unemploymen a es, and me o ype ha may in luence
he oppo uni ies and cons ain s o i m g ow h and en ep eneu ial ac i i y. The Mic o
Le el (En ep eneu ) ocuses on indi idual en ep eneu s and small i ms ope a ing wi hin
speci ic indus y sec o s. This le el emphasizes i m-speci ic cha ac e is ics and localized
ac ions ha di ec ly a ec scaling po en ial.
Economies 2025,13, 138 6 o 21
Economies 2025, 13, x FOR PEER REVIEW 6 o 22
Figu e 1. Mesoeconomic model o scaling small i ms.
2. Me hods
The cu en s udy examined how selec ed mesoeconomic ac o s in luence he scal-
ing o small i ms wi hin a egion using a c oss-sec ional esea ch design. The analysis
was based on da a om a single poin in ime (2022) and did no include a longi udinal o
ime-se ies componen . The me hodological app oach, da a sou ces, and esea ch design
a e ou lined in his sec ion.
2.1. Da a Sou ces and Va iables
The da a o his s udy we e ob ained om he U.S. Census Bu eau (2020), speci ically
om he Coun y Business Pa e ns (CBP) iles, which p o ide i m coun s ac oss 13 size
ca ego ies based on he o al employee numbe s (e.g., 50 o 99 employees). These coun s
a e a ailable a a ious indus y le els, classi ied acco ding o he No h Ame ican Indus-
y Classi ica ion Sys em (NAICS), a s anda d used by ede al s a is ical agencies o o -
ganize business es ablishmen s o da a collec ion and analysis. Using Fede al In o -
ma ion P ocessing S anda d (FIPS) codes o s a es and coun ies, a unique i e-digi
coun y ID was c ea ed o each eco d. Fo each coun y, i m coun s we e agg ega ed by
size ca ego y wi hin each unique ou -digi NAICS code, ep esen ing indus ies wi h
simila p ocesses o p oducing goods o se ices (U.S. Census Bu eau, 2022a, p. 15). F om
his i m coun summa y, ou nume ical a iables we e c ea ed o each eco d: Mic o
Fi ms ( ewe han 5 employees), Scaled Fi ms (5 o 99 employees), Midsize Fi ms (100 o
999 employees), and La ge Fi ms (1000+ employees). While he CBP da a iden i ied he
Mac o Le el
(Global, Fede al, S a e)
Meso Le el
(Coun y Region)
Indus y Sec o
Mic o Fi ms
Midsize Fi ms
La ge Fi ms
Household W eal h (%)
Di e si y Index
%BA+ Deg ees
%Unemploymen
Me o Type
Mic o Le el
(En ep eneu )
Small Fi m
Figu e 1. Mesoeconomic model o scaling small i ms.
2. Me hods
The cu en s udy examined how selec ed mesoeconomic ac o s in luence he scaling
o small i ms wi hin a egion using a c oss-sec ional esea ch design. The analysis was
based on da a om a single poin in ime (2022) and did no include a longi udinal o
ime-se ies componen . The me hodological app oach, da a sou ces, and esea ch design
a e ou lined in his sec ion.
2.1. Da a Sou ces and Va iables
The da a o his s udy we e ob ained om he U.S. Census Bu eau (2020), speci ically
om he Coun y Business Pa e ns (CBP) iles, which p o ide i m coun s ac oss 13 size
ca ego ies based on he o al employee numbe s (e.g., 50 o 99 employees). These coun s a e
a ailable a a ious indus y le els, classi ied acco ding o he No h Ame ican Indus y
Classi ica ion Sys em (NAICS), a s anda d used by ede al s a is ical agencies o o ganize
business es ablishmen s o da a collec ion and analysis. Using Fede al In o ma ion P o-
cessing S anda d (FIPS) codes o s a es and coun ies, a unique i e-digi coun y ID was
c ea ed o each eco d. Fo each coun y, i m coun s we e agg ega ed by size ca ego y
wi hin each unique ou -digi NAICS code, ep esen ing indus ies wi h simila p ocesses
o p oducing goods o se ices (U.S. Census Bu eau,2022a, p. 15). F om his i m coun
summa y, ou nume ical a iables we e c ea ed o each eco d: Mic o Fi ms ( ewe han
5 employees), Scaled Fi ms (5 o 99 employees), Midsize Fi ms (100 o 999 employees), and
La ge Fi ms (1000+ employees). While he CBP da a iden i ied he Mic o and La ge Fi ms
Economies 2025,13, 138 7 o 21
ca ego ies, he cu en s udy used Ga ne ’s (2025) de ini ions o he Scaled (small) and
Midsize i m ca ego ies.
F om he p ocessed CBP da a, wo addi ional a iables we e c ea ed o his s udy.
The i s was %Scaled Fi ms, a coun y-le el measu e calcula ed by di iding he numbe o
Scaled Fi ms by he combined o al o Mic o and Scaled Fi ms, hen mul iplying by 100.
The second a iable, NAICS Sec o , was de i ed om he NAICS indus y code. The i s
wo digi s o he ou -digi NAICS code ep esen he sec o , which classi ies indus ies in o
23 b oad ca ego ies o economic ac i i ies (U.S. Census Bu eau,2022a, p. 16). Using SAS
9.4 p ocedu es, he NAICS Sec o a iable was c ea ed by ex ac ing he i s wo digi s
om he ou -digi NAICS indus y code. Thus, while he ou -digi NAICS codes de ined
he uni o analysis, he 23 wo-digi NAICS sec o s de e mined he le el o analysis and
o ganized he cu en s udy’s esul s.
Using demog aphic da a om he U.S. Census Bu eau (2021a), a coun y-le el Di e si y
Index was calcula ed o his s udy. The Di e si y Index measu es he likelihood ha wo
andomly selec ed indi iduals in a coun y will belong o di e en e hnic/ acial g oups. To
de elop his measu e, demog aphic da a om 1 July 2020, was selec ed o indi iduals
aged 25 o 64 yea s (AGEGRP ca ego ies 6 h ough 13). The da a, which was ca ego ized by
gende , was hen combined by adding he male and emale coun s o each e hnic/ acial
g oup (U.S. Census Bu eau,2021b). To calcula e he index, he squa e o each e hnic/ acial
g oup’s pe cen age o he o al popula ion was summed. This sum was sub ac ed om
one and hen mul iplied by 100 o con e he p obabili y in o a pe cen age, making he
esul easie o in e p e . The o mula can be exp essed as ollows:
Di e si y Index = (1 −∑(%Race/E hnici yi2)) ×100
whe e each acial/e hnic g oup’s pe cen age is squa ed and summed be o e being sub-
ac ed om 1. The index anges om 0 o 100, whe e a alue o 0 signi ies no di e si y (all
indi iduals belong o he same e hnic o acial g oup), and a alue close o 100 ep esen s
high di e si y (indi iduals a e dis ibu ed ac oss mul iple e hnic o acial g oups) (U.S.
Census Bu eau,2021c).
The cu en s udy used coun y-le el da a om he U.S. Depa men o Ag icul u e
(U.S. Depa men o Ag icul u e,2020) o ob ain o he mesoeconomic a iables. The %BA+
Deg ee a iable, which ep esen s he pe cen age o he coun y popula ion wi h a bachelo ’s
deg ee o highe , was ob ained om a ile on educa ional a ainmen o adul s aged 25
o 65 yea s om 1970 o 2020. The %Unemploymen and Household Weal h a iables
we e de i ed om he USDA’s da a on unemploymen and median household income
o 2000–2021. Household Weal h is de ined by he a io o a coun y’s median household
income o he s a e’s median household income. Addi ionally, he USDA ile included a
u al–u ban con inuum code, a ca ego ical a iable anging om 1 o 9, which classi ies
coun ies based on co e popula ion size and hei in eg a ion wi h adjacen communi ies
(U.S. Census Bu eau,2022b). Fo he cu en s udy, hese 9 codes we e ede ined in o a
Me o Type a iable, whe e he smalles co e popula ion (2500, no adjacen o a me o a ea)
was assigned a alue o 0, and he la ges co e popula ion (1 million o mo e) was assigned
a alue o 8.
Using SAS p ocedu es, hese da a collec ions p ocessed o he cu en s udy we e
hen me ged by coun y ID. The inal da ase o analysis consis ed o 178,106 obse a ions
ep esen ing 272 ou -digi NAICS indus ies dis ibu ed ac oss he 23 wo-digi NAICS
sec o s.
Economies 2025,13, 138 8 o 21
2.2. Resea ch Design
This s udy employed a c oss-sec ional esea ch design, analyzing i m scaling de e mi-
nan s ac oss U.S. coun ies o a single yea (2022). The dependen a iable in he eg ession
model is he na u al loga i hm o Scaled Fi ms, which co ec s o skewness in he coun
dis ibu ion. The eg ession equa ion is speci ied as ollows:
ln(Scaled Fi msi) = β0+β1Mic o Fi msi+β2Midsize Fi msi+β3La ge Fi msi+
β4Household Weal hi+β5Di e si y Indexi+β6%BA Deg eesi+
β7%Unemploymen i+β8Me o Typei+εi
whe e i ep esen s a coun y egional uni ; he in e cep e m,
β0
, de ines he eg ession
cons an ; and
εi
is he e o e m, cap u ing unobse ed ac o s a ec ing Scaled Fi ms
in coun y i. The p edic o a iables consis o Mic o Fi ms, Midsize Fi ms, La ge Fi ms,
Household Weal h, Di e si y Index, %BA+ Deg ees, %Unemploymen , and Me o Type.
Fo a selec p edic o a iable, i s eg ession es ima e b mul iplied by 100 de ines o a
one-uni change in he p edic o , a b pe cen age change in Scaled Fi ms in na u al o m,
a e holding all o he co a ia es cons an . Thus, o a gi en indus ial sec o , a posi i e
β
es ima e sugges s ha he p edic o acili a es i m scaling, while a nega i e
β
es ima e
sugges s i hinde s scaling (Bazen,2011). Since his is a c oss-sec ional s udy, he indings
ep esen ela ionships a a single poin in ime (2022) and do no in e causali y o e ime.
Howe e , u u e esea ch could inco po a e panel da a o ack i m g ow h o e mul iple
yea s and con ol o ime-in a ian ac o s.
3. Resul s
Table 1shows desc ip i e s a is ics o he selec a iables. O he 3143 U.S. coun ies
iden i ied by he U.S. Census Bu eau (2022c), 3094 (98.4%) we e included in he cu en
s udy. The da ase comp ising 178,106 obse a ions, ep esen ed 272 dis inc ou -digi
NAICS indus ies ac oss 23 indus y sec o s. The o al numbe o i ms ac oss hese
indus ies was 6,658,923, dis ibu ed by size as de ailed in he able unde he CBP Fi m
Measu es label. Fo each NAICS indus y, he a e age numbe o Mic o, Scaled, and
Midsize Fi ms was 20.8 (SD = 57.2), 16.0 (SD = 59.9), and 0.6 (SD = 4.1), espec i ely. La ge
Fi ms had he ewes , wi h an a e age o 0.02 (SD = 0.4) pe NAICS indus y.
Among he Coun y Le el Measu es (n = 3094) p esen ed in Table 1, he a e age
household weal h was 90.3 (SD = 19.3). The median alue o 87.7 sugges ed ha mo e
han hal o he coun ies had household incomes below hei s a e’s median. The a e age
Di e si y Index was 31.5 (SD = 18.3), wi h alues anging om 4.0 o 78.0, e lec ing a
b oad spec um o di e si y le els om low o high ac oss he coun ies. The pe cen age o
adul s wi h a bachelo ’s deg ee o highe (%BA+ Deg ees) had an a e age o 22.7 pe cen
(SD = 9.7%), wi h alues anging om 1.5 o 79.1 pe cen o adul s aged 25 o 65. The
median o 20.2 pe cen indica es ha mo e han hal o he coun ies had app oxima ely one
in i e wo king adul s wi h a leas a bachelo ’s deg ee. The a e age unemploymen a e
(%Unemploymen ) was 6.8 pe cen (SD = 2.3%), and he median o 6.6 pe cen sugges s
ha mo e han hal o he coun ies had unemploymen a es a he lowe end o he ange,
which spanned om 6.6% o 22.8%.
Las ly, he Me o Type ca ego ical a iable anged in alues om 0 o 8, as de ined u -
he below in he able showing he dis ibu ion o coun ies ac oss he nine ca ego ies. The
a e age ca ego y was 4.0 (SD = 2.7) indica ing coun ies we e gene ally u ban popula ions
o 20,000 o mo e, no adjacen o a me o a ea. S ill, he median alue o 3 implied ha
mo e han hal o he coun ies had co e popula ions o less han 20,000.
Economies 2025,13, 138 15 o 21
Access o a di e si ied wo k o ce also had a posi i e e ec on scalabili y in 20 o he
23 indus ial sec o s. Di e se eams b ing di e en p oblem-sol ing pe spec i es, os e ing
inno a ion and enabling Mic o Fi ms o de elop niche p oduc s (Ra aqa e al.,2022). This
di e si y also enhances a small i m’s abili y o unde s and and add ess cus ome needs,
especially when expanding in o global ma ke s.
The cu en s udy also showed ha he ype o me opoli an a ea—e.g., u al, subu -
ban, o u ban—had a signi ican posi i e e ec on he scalabili y o small i ms in 21 o he
23 sec o s. Al hough scaling small i ms can be challenging in u al (Beckmann e al.,2021)
and subu ban a eas (Ha man & Kea ,2024;McGuinness e al.,2018), he esul s sugges
ha u ban a eas o e he mos a o able condi ions o scaling small i ms. Based on he
li e a u e, u ban en i onmen s p o ide la ge cus ome popula ions, di e se labo ma ke s,
and access o c i ical in as uc u e, such as echnology hubs and inancial ins i u ions,
which a e key esou ces o scaling small i ms (Sapu a & Da mawan,2023).
An addi ional insigh comes om he exponen ia ed mean o he dependen a iable,
de ined as he na u al log o Scaled Fi ms in Table 5. The esul s indica ed ha he Ag i-
cul u e (11) sec o had he smalles exponen ia ed mean, wi h 1.5 Scaled Fi ms, while he
Accommoda ion Se ices (72) sec o had he la ges exponen ia ed mean, a 9.2 Scaled
Fi ms. This inding ein o ces he sec o analysis in Table 2, which indica ed ha he scala-
bili y o small i ms was no uni o m ac oss sec o s—a inding ha aligns wi h p e ious
esea ch implying ha a small i m’s abili y o scale depends on he indus y sec o in
which i ope a es (e.g., H olko a e al.,2019;Pelle ie & Clou ie ,2019;N. Singh e al.,
2023).
To u he highligh his poin , conside ha he Ag icul u e (11) sec o encompasses
businesses p ima ily in ol ed in g owing c ops, aising animals, ha es ing imbe , and
ha es ing ish o o he animals (U.S. Census Bu eau,2022a, p. 16). In con as , he Ac-
commoda ion Se ices (72) sec o includes businesses p o iding lodging and/o p epa ing
meals, snacks, and be e ages o immedia e consump ion (U.S. Census Bu eau,2022a,
p. 16). Thus, while he Ag icul u e (11) sec o aces cons ain s such as limi ed land, high
capi al in ensi y, and challenging ma ke dynamics (Begimkulo & Da ,2023), he Accom-
moda ions (72) sec o bene i s om eplicable business models, demand-d i en g ow h,
and lexible s a egies o scaling (Cheah e al.,2023).
4.1. Assump ions and Limi a ions
These indings should be in e p e ed in ligh o he ollowing assump ions and lim-
i a ions. The da a in his s udy we e de i ed om su ey samples, which o e imely
and cos -e ec i e es ima es o demog aphic and economic cha ac e is ics. Analys s hen
applied es ima ion echniques o ex apola e hese sample es ima es o he en i e U.S. popu-
la ion (e.g., U.S. Census Bu eau,2022d). As a esul , he cu en s udy assumed he indings
we e applicable o all coun ies ep esen ed in he da a.
In he cu en s udy, he uni o analysis was de ined by NAICS indus ies, while
he le el o analysis was de e mined by he 23 NAICS sec o s. I was assumed ha he
p edic o e ec s—o lack he eo —obse ed o a gi en wo-digi sec o applied ac oss i s
NAICS indus ies a he ou -digi code le el. Resul s may ha e a ied ac oss indus ies
wi hin a sec o ; howe e , he s udy was cons ained by p ac ical limi a ions in he esea ch
design. Analyzing he da a a he NAICS indus y le el would ha e esul ed in ables wi h
indings o 272 unique ou -digi indus y codes, which would ha e exceeded he space
a ailable o publica ion.
Las ly, he cu en s udy acknowledges he limi a ions o he esul s om he absence
o o he egional mesoeconomic p edic o a iables in he eg ession model ha migh
inc ease he R
2
alue and he eby, u he explain he a ia ion in scaling small i ms o
Economies 2025,13, 138 16 o 21
selec NAICS sec o s. Examples o such p edic o s known o impac small business g ow h
include ac o s like he egula o y en i onmen (Solano e al.,2023), cul u al a i udes abou
en ep eneu ship, isk- aking, and inno a ion (A ak e al.,2020), and a egion’s poli ical
s abili y and go e nance s uc u e (Abegaz e al.,2023).
4.2. Con ibu ions o Regional De elopmen : Policy and P ac ice
Despi e he assump ions and limi a ions, he cu en s udy’s indings p o ide aluable
insigh s in o he ela ionship be ween mesoeconomic ac o s and small business scalabili y
wi hin egional de elopmen , emphasizing he ans o ma i e ole o place in os e ing
en ep eneu ial g ow h (Cainelli e al.,2022). In pa icula , he indings highligh ed he
impo ance o MSFs as key enable s o small i m scalabili y, suppo ing he concep o
in e i m in e dependence wi hin egional ecosys ems. These collabo a i e ela ionships
s imula e inno a ion, esou ce sha ing, and economic g ow h (Daniel e al.,2022;Munyo
& Veiga,2024;Qian & Acs,2023). Policymake s should ha ness hese dynamics by p o-
mo ing indus y pa ne ships, incuba o s, and inno a ion hubs ha connec small and
Midsize Fi ms o enhance small business scalabili y and s eng hening egional economies
(Aud e sch e al.,2024).
The cu en s udy also e ealed spa ial dispa i ies be ween u ban, subu ban, and
u al a eas in suppo ing small business scalabili y. U ban egions, wi h hei ad anced
in as uc u e, skilled labo , and ma ke access, p o ide dis inc ad an ages o e u al
a eas (Ha man & Kea ,2024;Sapu a & Da mawan,2023). Howe e , he en ep eneu ial
po en ial o u al egions can be unlocked h ough a ge ed policies, such as b oadband
expansion, in as uc u e imp o emen s, and unding ini ia i es o b idge hese gaps
(Beckmann e al.,2021;McGuinness e al.,2018). By os e ing c oss- egional in eg a ion—
such as digi al ne wo ks, supply chain collabo a ions, and knowledge-sha ing pla o ms—
policymake s can c ea e syne gies be ween u ban cen e s and u al a eas, enhancing
egional economic esilience (Ba ne e al.,2024).
As no ed ea lie , human capi al and wo k o ce di e si y we e c i ical d i e s o scala-
bili y and egional compe i i eness. Regions wi h a highly educa ed and di e se wo k o ce
demons a e g ea e en ep eneu ial inno a ion, aligning wi h human capi al heo ies
linking skills and di e si y o i m g ow h (A shed e al.,2024;Bauman & Lucy,2021).
Policymake s can le e age his ad an age by in es ing in educa ion, wo k o ce de elop-
men , and di e si y ini ia i es ailo ed o local indus y needs. Inclusi e hi ing p ac ices
and suppo o immig an en ep eneu ship, o example, can u he s imula e inno a-
ion and economic ib ancy wi hin egions (Ra aqa e al.,2022). When combined wi h
sec o -speci ic in e en ions aligned wi h egional s eng hs, hese s a egies can add ess
scalabili y challenges aced by small i ms and p omo e long- e m economic de elopmen
(H olko a e al.,2019;Pelle ie & Clou ie ,2019).
O e all, he cu en s udy highligh s he dynamic in e play be ween place, en-
ep eneu ship, and egional de elopmen . E ec i e place-based policies ha add ess
spa ial dispa i ies, s eng hen egional ecosys ems, and p io i ize human capi al de elop-
men can unlock small business scalabili y ac oss di e se egions. By aligning policies wi h
local con ex s and os e ing u ban– u al complemen a i ies, policymake s can enhance hei
egion’s esilience and compe i i eness, d i ing sus ainable and inclusi e economic g ow h
(Cheah e al.,2023;Ha man & Kea ,2024). To summa ize, speci ic policy ecommenda ions
include he ollowing:
•
U ban Regions: Policymake s should suppo Midsize Fi ms h ough public–p i a e
inno a ion clus e s ha os e collabo a ion be ween uni e si ies, go e nmen agen-
cies, and businesses. While u ban a eas bene i om dense business ne wo ks, hey
may also equi e policies o educe conges ion cos s and imp o e access o skilled labo .
Economies 2025,13, 138 17 o 21
•
Subu ban Regions: Policymake s should de elop ad anced skill-based wo k o ce
aining p og ams ha align wi h egional indus y needs o add ess labo misma ches
and enhance small i m scalabili y. As ansi ion zones wi h mixed indus y composi-
ions, subu ban a eas may also equi e lexible business suppo se ices o sus ain
long- e m economic g ow h.
•
Ru al Regions: Policymake s should p io i ize in as uc u e in es men s, pa icula ly
in b oadband access, anspo a ion ne wo ks, and a ge ed unding o s imula e
en ep eneu ial ac i i y. Howe e , u al a eas ace challenges such as low popula ion
densi y and limi ed inancial esou ces, necessi a ing public in es men s in digi al
in as uc u e and local en ep eneu ship ini ia i es.
4.3. Fu u e Resea ch Wi hin he Con ex o he La es S udies on Scaling Fi ms
Resea che s ha e inc easingly iewed small i m scaling h ough mul i ace ed lenses
ha inco po a e s uc u al, s a egic, and con ex ual elemen s. Fo example, Aud e sch
e al. (2024) p oposed a dual-le el amewo k ha dis inguished be ween i m-speci ic
(mic o) and ecosys emic (mac o) in luences. They a gue ha scaling depends on aligning
in e nal capabili ies—such as leade ship and inno a ion—wi h ex e nal condi ions like
policy, capi al access, and egional ecosys ems. The cu en s udy suppo s he esea che s’
p emise by ad ancing he no ion ha a i m’s embeddedness in a b oade socio-economic
con ex a he mesoeconomic le el is also a ac o in scaling. In compa ison, Beli ski e al.
(2023) in oduced he concep o “accele a ed i m g ow h”, highligh ing empo al agili y
as a key ac o . Thei indings sugges ha i ms capable o quickly sensing and seizing
g ow h oppo uni ies ou pe o m pee s, ega dless o ini ial esou ces. The cu en s udy’s
indus y-sec o analysis complemen s his by showing how sec o al con ex may shape
i ms’ agili y and access o g ow h oppo uni ies. In a simila manne , Mansikkamäki (2023)
in oduced a li e-cycle pe spec i e, asse ing ha i m age and size signi ican ly shape
scaling ajec o ies. He ca ego ized i ms in o di e en g ow h–p o i abili y con igu a ions,
e ealing ha younge i ms o en p io i ize g ow h o e p o i abili y, whe eas ma u e i ms
shi owa d sus ainable p o i ma gins. This model sugges s ha scaling s a egies mus be
age-con ingen and dynamic, adjus ing as i ms ansi ion h ough s ages o de elopmen .
The cu en s udy’s mesoeconomic de e minan s could add u he con ex o his model o
explain when such ansi ions bes occu .
O he esea che s ha e sough o b ing mo e o de and cla i y o he s udy o scaling
small i ms. Fo example, Ga cia-Ma inez e al. (2023) conduc ed a me a-analysis on
SME g ow h, iden i ying inconsis encies in how scaling is de ined and measu ed. They
call o longi udinal and con igu a ional esea ch designs ha can cap u e episodic o
non-linea g ow h pa hs. Thei ecommenda ion aligns wi h he cu en s udy’s ocus
on mesoeconomic ac o s, which could se e as eg ession media o s in u u e esea ch.
In con as , Co iello e al. (2024) cla i y he dis inc ion be ween scalabili y and scale-up,
aming scalabili y as an in en ional design p inciple. They emphasize aligning business
models and ope a ions wi h g ow h eadiness om he ou se . Toge he , hese mos ecen
s udies a icula e a mo e nuanced unde s anding o small i m scaling by inco po a ing
ecosys em in luences, ime sensi i i y, li e-cycle s ages, and s uc u al p epa edness. Fu u e
esea ch should con inue in eg a ing hese dimensions. In his con ex , he cu en s udy’s
mesoeconomic de e minan s may se e as a use ul amewo k o iden i ying how ex e nal
egional ac o s shape di e se scaling ajec o ies.
Building on he esul s p esen ed he e, u u e esea ch could expand he eg ession
model o include addi ional egional-le el p edic o a iables o illumina e u he wha
mesoeconomic ac o s in luence small i m scaling pe sec o . Howe e , possibili ies o
mo e immedia e esea ch exis using he s udy’s da a collec ion. The indings sugges ed
Economies 2025,13, 138 18 o 21
a posi i e ela ionship be ween Scaled Fi ms and Mic o Fi ms based on he eg ession
es ima es in Table 2. How he p esence o Scaled Fi ms and he mesoeconomic ac o s
ela e o Mic o Fi m o ma ion by sec o would con ibu e o he cu en s udy’s indings.
Simila ly, he indings sugges ed an o e all posi i e ela ionship be ween Scaled Fi ms and
Midsize Fi ms based on he eg ession es ima es in Table 2. How he p esence o Scaled
Fi ms and he mesoeconomic ac o s ela e o Midsize Fi m expansion by sec o would also
con ibu e o he cu en s udy’s indings.
Fu u e esea ch migh hen examine he mesoeconomic ac o s as de e minan s o
la ge i m sus ainabili y. The cu en s udy showed mos ly an in e se ela ionship be ween
scaled and la ge i ms based on he nega i e eg ession es ima es in Table 2. E en so,
how he p esence o Scaled Fi ms and he mesoeconomic ac o s ela e o La ge Fi m
sus ainabili y by sec o would complemen he cu en s udy’s indings.
5. Conclusions
This s udy p o ides new insigh s in o how mesoeconomic ac o s—such as Midsize
Fi m collabo a ion, wo k o ce di e si y, and egional economic condi ions—shape small
i m scalabili y ac oss indus y sec o s and geog aphic egions. Based on Endogenous
G ow h Theo y and New Economic Geog aphy, he indings highligh ed he ole o Midsize
Fi ms, wo k o ce di e si y, human capi al, and egional economic condi ions in shaping
small business g ow h.
The indings unde sco e ha small i m scalabili y is shaped by bo h indus y sec o
dynamics and egional economic condi ions. Sec o s such as e ail, managemen , and
heal hca e o e g ea e expansion oppo uni ies, while ag icul u e and u ili ies ace s uc-
u al cons ain s. These challenges a e u he compounded by egional dispa i ies, whe e
u ban a eas bene i om dense business ne wo ks and in as uc u e ad an ages, whe eas
u al egions s uggle wi h limi ed inancial esou ces, labo a ailabili y, and connec i i y.
Midsize i ms eme ged as key enable s o small i m scalabili y, os e ing in e i m in e de-
pendence ha d i es inno a ion and esou ce-sha ing. Howe e , la ge i ms, pa icula ly
in e ically in eg a ed indus ies, can ac as ba ie s by limi ing supplie and ma ke
en y oppo uni ies. Mo eo e , egional dispa i ies exace ba e hese challenges, wi h u ban
cen e s bene i ing om business ne wo ks and in as uc u e, while u al egions con end
wi h labo sho ages and limi ed inancial esou ces. These indings unde sco e he need
o a ge ed, place-based policies o suppo small i m g ow h ac oss di e se economic
landscapes.
F om a policy and p ac ice s andpoin , his s udy ou lines key s a egies o egional
economic de elopmen . U ban policymake s should s eng hen public–p i a e inno a-
ion clus e s o enhance collabo a ion be ween uni e si ies, businesses, and go e nmen
agencies. Subu ban egions bene i om ad anced wo k o ce aining p og ams aligned
wi h indus y demands, educing skill misma ches and imp o ing small i m scalabil-
i y. Fo u al egions, in es men s in digi al in as uc u e, b oadband expansion, and
a ge ed inancial incen i es a e c i ical o o e coming ba ie s and os e ing en ep eneu -
ship. Addi ionally, c oss- egional in eg a ion s a egies—such as digi al supply chains
and knowledge-sha ing pla o ms—can help b idge he u ban– u al di ide, enhancing
economic esilience.
The s udy also p o ided a ounda ion o u u e esea ch on small i m scalabili y by
emphasizing mesoeconomic de e minan s ha in luence en ep eneu ial ecosys ems. Fu -
he esea ch should explo e how Scaled Fi ms con ibu e o new small i m o ma ion and
Midsize Fi m expansion, o e ing a mo e comp ehensi e iew o business ecosys em e olu-
ion. Addi ionally, inco po a ing egula o y, cul u al, and ins i u ional ac o s in o u u e
models could p o ide deepe insigh s in o b oade egional economic compe i i eness.
Economies 2025,13, 138 19 o 21
In summa y, his s udy’s indings p o ide di ec implica ions o policymake s, en-
ep eneu s, and economic de elope s seeking o os e inclusi e and sus ainable egional
g ow h. Unlocking egional economic g ow h equi es a ge ed, da a-d i en policies ha
b idge sec o al and egional dispa i ies. By s eng hening wo k o ce de elopmen , ex-
panding in as uc u e in es men , and os e ing in e i m collabo a ion, policymake s can
di ec ly suppo small i m scalabili y—unlocking egional economic g ow h and ensu ing
long- e m economic esilience.
Funding: This esea ch ecei ed no ex e nal unding.
Ins i u ional Re iew Boa d S a emen : No applicable.
In o med Consen S a emen : No applicable.
Da a A ailabili y S a emen : The da a p esen ed in his s udy a e a ailable in he public domain
and accessible online ia URLs included in he Re e ence sec ion, ci ed by sou ce iden i ied in he
Me hods sec ion.
Con lic s o In e es : The au ho decla es no con lic o in e es .
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