Relationship Between Firm Size, Wage Dispersion and Firm Performance

A simple theoretical model explains the divergent empirical results concerning the effect of wage dispersion on firm performance. First, causality in the relationship is clarified. Then, through the model, it is shown that firm performance is non-monotonic with respect to wage dispersion. Likewise, it is shown that large firms are more likely to benefit from a dispersed wage structure than small firms.

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Year of publication:	2010
Authors:	Zambrano, Homero
Published in:	Journal of Income Distribution. - Economics Department. - Vol. 19.2010, 2, p. 33-50
Publisher:	Economics Department
Subject:	wage inequality \| firm performance

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Extent:	application/pdf
Type of publication:	Article
Classification:	J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008673295