FIRM SIZE AND MONITORING

Cheryl Long () and Richard Boylan ()
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Cheryl Long: Colgate University

Economics Bulletin, 2003, vol. 4, issue 34, pages 1-5

Abstract: We present a model of optimal monitoring expenditures. For any technology that yields a conventional ``S-shaped'' production function for monitoring, the optimal level of monitoring is shown to be higher in medium-sized firms than in both small and large firms. Further, the interaction between specialization and agency are shown to lead to an ``S-shaped'' production function.

Keywords: Specialization; Monitoring; Firm size (search for similar items in EconPapers)
JEL-codes: D2 M1 (search for similar items in EconPapers)
Date: 2003 Written
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