Economists have long puzzled over the fact that large firms pay higher wages than small firms, even after controlling for worker’s observed productive characteristics. One possible explanation has been that firm size is correlated with unobserved productive attributes which confound firm...

  We hypothesize that hog production can be characterized by complementarities between new technologies, worker skills and farms size.  Such production processes are consistent with Kremer’s (1993) O-ring production theory in which a single mistake in any one of several complementary...