Firm Heterogeneity and Production Flexibility: Evidence from Price-Cost Margins of Large and Small Firm
Bulletin of Economic Research
The distribution of firm sizes is widely recognized as an important aspect of firm heterogeneity. A vast literature has evolved from the early efforts of Modigliani (1958) and Sylos-Labini (1962) that is concerned with explaining why firm size varies across industries. The determinants of the inter-industry distribution of firm size include scale economies, capital requirements, and government policy. Industries with a large minimum efficient scale of output, for example, are less conducive to the entry and survival of small firms (Weiss (1976)).
Firm Heterogeneity and Production Flexibility: Evidence from Price-Cost Margins of Large and Small Firms” (with William F. Chappell and Walter J. Mayer), Bulletin of Economic Research 45 (July 1993), pp. 229–244.