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

Markus Poschke

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: How and why does the firm size distribution differ across countries? This paper documents that features of the firm size distribution are strongly associated with income per capita. Richer countries have fewer entrepreneurs and fewer small firms. The average, dispersion and skewness of firm size are all larger in richer countries. A simple general equilibrium model of occupational choice with skill-biased change in entrepreneurial technology calibrated to U.S. data can account very well for these patterns. The crucial assumption is that some entrepreneurs benefit more from technological progress than others. Marginal entrepreneurs then switch to becoming employees as technology advances.

Keywords: Occupational choice; entrepreneurship; firm size; skill-biased technical change (search for similar items in EconPapers)
JEL-codes: E24 J24 L11 L26 O30 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: The Firm Size Distribution across Countries and Skill-Biased Change in Entrepreneurial Technology (2018)
Working Paper: The Firm Size Distribution across Countries and Skill-Biased Change in Entrepreneurial Technology (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:08-2011

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