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Grossmann, Volker
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 914
This paper develops a model with multiple market locations in which the quality of intangible assets of firms, provided by management, determines the firms. performance. Despite an ex ante symmetry of potential entrants, the equilibrium assignment of heterogeneous managerial skills to firms tends to be asymmetric. This sorting outcome determines both the goods market structure at single locations and the size distribution of firms. Results are consistent with a number of observed patterns regarding the size distribution of firms and establishments, and the relation of firm size to profitability, productivity, managerial skills and manager remuneration.
asymmetric equilibrium
firm size
intangible assets
managerial job assignment
Document Type: 
Working Paper

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