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The Firm Size Distribution across Countries and Skill-Biased Change in Entrepreneurial Technology†

The Firm Size Distribution across Countries and Skill-Biased Change in Entrepreneurial Technology† AbstractDevelopment is associated with systematic changes in the firm size distribution. I document that the mean and dispersion of firm size are larger in rich countries, and increased over time for US firms. To analyze the firm size-development link, I construct a frictionless general equilibrium model of occupational choice with skill-biased change in entrepreneurial technology (i.e., technical progress favors better entrepreneurs). The model accounts for key aspects of the US experience with only changes in aggregate technology. It attributes half the variation in mean and dispersion of firm size across countries to technical change. Distortions also affect the size distribution. (JEL J24, L11, L25, L26, O33) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Macroeconomics American Economic Association

The Firm Size Distribution across Countries and Skill-Biased Change in Entrepreneurial Technology†

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Publisher
American Economic Association
Copyright
Copyright © 2018 © American Economic Association
ISSN
1945-7715
DOI
10.1257/mac.20140181
Publisher site
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Abstract

AbstractDevelopment is associated with systematic changes in the firm size distribution. I document that the mean and dispersion of firm size are larger in rich countries, and increased over time for US firms. To analyze the firm size-development link, I construct a frictionless general equilibrium model of occupational choice with skill-biased change in entrepreneurial technology (i.e., technical progress favors better entrepreneurs). The model accounts for key aspects of the US experience with only changes in aggregate technology. It attributes half the variation in mean and dispersion of firm size across countries to technical change. Distortions also affect the size distribution. (JEL J24, L11, L25, L26, O33)

Journal

American Economic Journal: Macroeconomics – American Economic Association

Published: Jul 1, 2018

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