Firm size and diversification: Multiproduct firms in asymmetric oligopoly
BP2-STS
- Grossmann, Volker ORCID University of Fribourg
- 2007
Published in:
- International Journal of Industrial Organization. - Elsevier BV. - 2007, vol. 25, no. 1, p. 51-67
Asymmetric equilibrium
Diversification
Firm size
Quality–cost margin
Multiproduct firms
Job assignment
Manager wages
Productivity
Strategy and Management
Industrial relations
Economics
Econometrics and Finance (miscellaneous)
Economics and Econometrics
English
This paper explores the equilibrium assignment of nonproduction workers across ex ante identical firms which results from this interaction between product market and the market for nonproduction skills. The analysis suggests that, typically, large and productive firms coexist with small, low-productivity firms. Consistent with empirical evidence, a skewed distribution of firm size tends to arise. Moreover, the model predicts a positive relationship of firm size to productivity, manager quality, and manager remuneration. Finally, according to comparative-static analysis, higher intensity of product market competition can account for increases in the compensation at the top of the wage distribution.
- Faculty
- Faculté des sciences économiques et sociales et du management
- Department
- Département d'économie politique
- Language
-
- English
- Classification
- Economics
- License
- Rights reserved
- Open access status
- green
- Identifiers
-
- DOI 10.1016/j.ijindorg.2005.12.003
- ISSN 0167-7187
- Persistent URL
- https://folia.unifr.ch/unifr/documents/323696
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