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A theory of factor allocation and plant size
Author(s) -
Holmes Thomas J.,
Mitchell Matthew F.
Publication year - 2008
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/j.0741-6261.2008.00017.x
Subject(s) - economics , factor price , growth theory , factor (programming language) , capital (architecture) , microeconomics , trade theory , neoclassical economics , international trade , computer science , free trade , archaeology , history , programming language
This article develops a theory of how capital, skilled labor, and unskilled labor interact at the plant level. The theory has implications for the relationship between factor allocation and plant size and the effects of trade and growth on the skill premium. The theory is consistent with certain facts about factor allocation and factor price changes in the 19th and 20th centuries.