Selection of workers and firm heterogeneity

George W.J. Hendrikse*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


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 languageEnglish
Pages (from-to)105-111
Number of pages7
JournalSmall Business Economics
Issue number2
Publication statusPublished - Jun 1992
Externally publishedYes


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