Micro and macro factors of firm scaling

While firm scaling has been overlooked in previous management literature, this study provides an in-depth examination of the micro- and macro-level factors that enhance firm scaling. Viewing firm size, age, and scaling in prior period as micro factors of scaling, such as foreign employees as potentially rich international knowledge sources as well as regional economic development, we draw attention to the likelihood of firm scaling using panel data spanning 971,504 UK-based firms and 9,220,892 firm-year observations during 2002-2017. Our results show that (a) firm age decreases the likelihood of scaling, while firm size and scaling in prior period enhances the likelihood of scaling, (b) firms in regions with higher economic development are more likely to scale while the effect of localized knowledge spillovers from foreign employees on firm scaling depends on firm size.