A theory of factor allocation and plant size

Thomas J. Holmes, Matthew F. Mitchell

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)329-351
Number of pages23
JournalRAND Journal of Economics
Volume39
Issue number2
DOIs
StatePublished - Jun 2008

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