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On the Size Distribution of Business Firms

1978; Volume: 9; Issue: 2 Linguagem: Inglês

10.2307/3003596

2326-3032

Robert E. Lucas,

Economic Growth and Productivity

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.