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The Size of the Firm and Social Division of Labour

Guang-Zhen Sun

Australian Economic Papers, 2000, vol. 39, issue 3, 263-277

Abstract: This paper develops a formal model with transaction costs and economies of specialisation to address the size of the firm and the level of social division of labour. It is shown that the increase of the level of social division of labour and the decline of firm size may concur, and that the size of the firm crucially depends on, among other things, the relative transaction efficiency of the labour market with that of the markets for intermediate products.

Date: 2000
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https://doi.org/10.1111/1467-8454.00090

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