Against the backdrop of promoting high-quality development of the real economy and building a modern industrial system, specialized, refined, distinctive and innovative (SRDI) small and medium-sized enterprises have become a key driving force for advancing the real economy in depth, and the cultivation of SRDI firms has emerged as an important component of China’s industrial policy framework. In recent years, supported by multiple policy measures such as fiscal subsidies, tax incentives and financial assistance, the number and scale of SRDI firms have continued to expand. However, research on the impact of obtaining the SRDI designation on firm growth and its underlying mechanisms remains relatively limited. Based on a sample of A-share listed firms from 2014 to 2022, this paper employs a multi-period difference-in-differences (DID) approach to examine the impact of the SRDI designation on firm growth and to explore its transmission channels. Firm growth is primarily measured by Tobin’s Q, with robustness verified using indicators such as asset turnover, fixed asset growth rate, and operating revenue growth rate to enhance the reliability of the findings. The results indicate that obtaining the SRDI designation significantly promotes firm growth. This conclusion remains robust after a battery of tests, including parallel trend tests, placebo tests, propensity score matching DID (PSM-DID), instrumental variable estimation, substitution of firm growth metrics, re-winsorization of control variables, exclusion of pandemic effects, and adjustment of the sample period. Mechanism analysis reveals that the SRDI designation operates through three pathways: alleviating financing constraints, enhancing technological innovation, and improving firms’ positions within the industrial chain. Specifically, the financing constraint index significantly decreases; firm R&D investment, innovation output, and innovation efficiency significantly improve; and the structure of supplier/customer concentration and bargaining power are optimized, exhibiting a masking effect. This finding implies that firms need to strike a balance between short-term relational adjustments and long-term cooperation stability when strengthening their industrial chain positioning. Further heterogeneity analyses show that the growth-enhancing effect of the SRDI designation is more pronounced for firms located in eastern regions, operating in competitive industries and non-manufacturing sectors, characterized as non-state-owned enterprises, and receiving SRDI designation at the provincial level. These results provide important empirical evidence for the implementation of more targeted and differentiated policy measures. The marginal contributions of this paper are threefold. First, from a comprehensive perspective of firm growth, this study systematically identifies the causal effect of the SRDI designation, thereby complementing existing research that focuses primarily on partial performance indicators. Second, it constructs an integrated analytical framework encompassing financing, technological innovation and industrial chain positioning, and innovatively incorporates industrial chain bargaining power into the mechanism analysis, deepening the understanding of how the SRDI designation affects firm growth. Third, by conducting multidimensional heterogeneity analyses, this paper clarifies the boundary conditions under which the policy effects materialize, offering empirical support for differentiated policy design. Based on these findings, this study proposes policy recommendations including the establishment of differentiated support systems, the optimization of financial support policies, the strengthening of innovation policy support, and the exploration of supply chain development mechanisms, thereby providing theoretical foundations and policy implications for further deepening the cultivation system of SRDI firms and promoting the development of small and medium-sized enterprises.