This paper, instrumented with six theorems, shows that differences between firms in labor productivity, capital intensity and relative demand for skilled labor can be explained by differences in the substitution parameters between capital, skilled and unskilled labor in the presence of skill...

The analysis focuses on the extent to which the production function of firms exhibits systematical differences regarding the employment size. We evaluate the extent to which differences in the elasticities of substitution between skill-groups are of the magnitude to explain the firm-size effect...