Are Small Firms Really Sub-Optimal?: Compensating Factor Differentials in Small Dutch Manufacturing Firms

David Audretsch (), George Leeuwen, Albert Menkveld and Roy Thurik

Working Papers from NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM

Abstract: The advent of a growing share of small firms in modern economies raises some intriguing questions. The most intriguing question undoubtedly is why so many smaller firms, which have traditionally been classified as sub-optimal scale firms, can exist. The authors suggest that, through pursuing a strategy of copmpensating factor differentials, that is by remunerating and deploying factors of production differently than their larger counterparts, small firms are able to compensate for inherent-siza cost disadvantages.

Keywords: SIZE OF ENTERPRISE; MANUFACTURES; EFFICIENCY (search for similar items in EconPapers)
JEL-codes: L11 L21 L60 O12 (search for similar items in EconPapers)
Pages: 47 pages
Date: 1999
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Working Paper: Are small firms really sub-optimal?: compensating factor differentials in small Dutch manufacturing firms (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:miklrr:9902/e

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