Small and medium-sized firms frequently are viewed as the drivers of radical innovation. However, they often do not have the focus and commitment necessary for improving and extending the innovation, tasks better accomplished by routinized large firms. Using a uniquely rich industry-level data...

We use an extensive,matched employer-employee dataset to analyze the employer-size wage relation and its contribution to wage inequality in Germany. Applying models with additive fixed effects for workers and establishments, we document that the large firm wage premium, which has risen over 25...