Abstract
A model based on differences between workers regarding their preferences for wage and leisure drives the heterogeneity of firms result. The more industrious workers are driven to small firms due to free riding in large firms. An industry consisting of small and large firms turns out to produce more output than an industry consisting of only large firms. Some comparative statics results are derived with respect to the size of large firms, the productivity difference between firms, and monitoring capabilities.
| Original language | English |
|---|---|
| Pages (from-to) | 105-111 |
| Number of pages | 7 |
| Journal | Small Business Economics |
| Volume | 4 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - Jun 1992 |
| Externally published | Yes |