Company Size Dynamics and Growth Barriers Among Finnish Companies

Laurikka Annu

Abstract

The report examines the dynamics of company size classes in Finland and the relationship between growth barriers and company size. It investigates how Finnish companies have moved between different company size categories from 2008 to 2020, categorizing them based on both the number of employees and revenue. The study also explores growth barriers and whether companies of different sizes face different barriers.

The results suggest that companies are more likely to shrunk to a smaller size category rather than to grow into a larger one. However, most companies remain in the same size category during both the three-year and five-year observation periods. Heavy regulations and a desire to avoid debt are the most common barriers to growth experienced by companies. Statistically significant differences between size categories were observed for seven growth barriers. The smallest micro-enterprises are more likely to experience growth barriers compared to larger companies, either because they want to avoid taking on debt or because they have deficiencies in sales and marketing. Small and medium-sized enterprises (SMEs) encounter growth barriers more frequently than micro-enterprises due to higher cost levels compared to competitors. The fewest growth obstacles were encountered in the Mittelstand company size category.

Publication info

Results of research
The Attractiveness of Finland as a Location for Productive Companies and Talented People
Research group
Labour market and education
Series
ETLA Raportit - Reports 141
Date
13.11.2023
Keywords
Company size, Company size dynamics, Growth, Growth barrier
ISSN
2323-2447, 2323-2455 (Pdf)
JEL
L11, L20, L21, L25, D22
Pages
28
Language
Finnish