FIRM SIZE AND MONITORING

Cheryl Long () and Richard Boylan ()
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Cheryl Long: Colgate University
Richard Boylan: Culver College of Commerce and Business Administration, University of Alabama

Economics Bulletin, 2003, vol. 4, issue 34, 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.

JEL-codes: D2 M1 (search for similar items in EconPapers)
Date: 2003-11-07
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