On the Size Distribution of Business Firms
Volume: Volume 9, No. 2
Issue: Autumn 1978
Pages: pp. 508-523
Authors: Robert E. Lucas, Jr.
Title: On the Size Distribution of Business Firms
Abstract: This paper proposes a new theory of the size distributions of business firms. It postulates an underlying distribution of persons by managerial "talent" and then studies the division of persons into managers and employees and the allocation of productive factors across managers. The implications of the theory for secular changes in average firm size are developed and tested on U.S. time series.
JEL Classification
Managerial Economics (5120)
Market Structure: Industrial Organization and Corporate Strategy (6110)